COVID-19 [August] update: its impact on construction projects

COVID-19 [August] update: its impact on construction projects

COVID-19 continues to impact the UK economy in general, and construction projects in particular. Read on for the latest construction and engineering industry insights, facts and figures.

Coronavirus daily cases on the rise again

As lockdown measures were lifted throughout June and July, the panic caused by the pandemic started to dissolve. Pubs and restaurants re-opened and many people went back to their normal lives. New daily COVID-19 cases in the UK for the last week of July varied between 581 and 880. These numbers seem to suggest that the situation is under control.

However, recent survey data published by the Office for National Statistics seems to suggest infections are rising in England. The ONS carried out a sample of households and found that daily cases for the last week of July increased from 3,200 to 4,200 since the previous week. The estimated daily cases by the ONS are higher than those reported by the Department for Health and Social Care because they include people without symptoms who would not otherwise have been tested.

Due to the estimated increase in coronavirus cases, especially in some areas of northern England, Prime Minister Boris Johnson postponed the easing of lockdown restrictions due to come into effect last weekend. As Mr Johnson put it, it is time to ‘squeeze the brake pedal.’ Additional measures will also be implemented, such as mandatory masks in more indoor settings like cinemas.

Back to work with new risks

In the midst of the chaos, employers – including construction and engineering companies – now have the discretion to open offices and workplaces since 1st August. The Health and Safety Executive has warned about the risks associated with legionella, as a result of the stagnant water in plumbing systems. The Building Engineering Services Association (BESA), has produced guidance on managing this and other issues when reactivating buildings.

Also, the self-isolation period for people with symptoms of coronavirus or positive testing increased from 7 to 10 days. This is the result of evidence showing how the virus has continued to spread, following visits to friends and relatives, after 7 days. If you are an employer and decide to open your office/workspace, you need to ensure that all individuals who tested positive comply with the 10-day self-isolation period. Additionally, you will need to comply with all the required government guidelines.

Construction firms announce further job cuts

Construction companies continue to take the hit of the pandemic. Contractor McAlpine has confirmed it will cut 132 jobs because of COVID-19 – 6% of their workforce. Chief executive Paul Hamer said at the end of July:

‘While we are seeking to do our best by our people, in the coming months we are compelled to make some very difficult decisions. The changes are aimed at enhancing the long-term resilience and sustainability of our business rather than short-term cost-cutting.’

This is just one example of the tremendous impact that COVID-19 is having on construction companies and projects. Back in May, construction firm Wates was one of the first to announce job cuts. Now, the latest figures at the end of July indicate that almost 6,400 jobs have been cut by the industry. Most engineering and construction firms have opted for mass redundancies to cope with the pandemic crisis.

Major projects continue to feel the squeeze

Meanwhile, other major projects will still suffer the impact of COVID-19 for a long time. Crossrail, for example, has announced that the opening of the central section between Paddington and Abbey Wood by next summer will not be achievable. They have blamed this new delay on the time lost during the lockdown site closure.

Another casualty, Hinkley Point C has also suffered a recent hit. According to the BBC, ‘a concrete-making plant supplying the construction of Hinkley Point C has been closed after 22 employees tested positive for COVID-19.’ Nigel Cann, construction delivery director, said:

‘At the beginning of the pandemic, we moved quickly to reduce the numbers on site to enable safe working. We have been able to slowly increase numbers in the last few months with new ways of working. This includes staggering shifts to avoid congestion and creating separated teams to avoid the risk of infection. We now have around 4,500 people on site in a 24-hour period – which is still below our pre-pandemic levels.’

Positive news in the midst of the chaos

A customer data analysis carried out by fuel card supplier Allstar Business Solutions reveals an increase in construction industry road traffic. To be precise, construction workers travelled 43 million extra miles in June, representing a 34% increase from May. This could represent some good news as a result of the initial lifting of lockdown restrictions. However, the company reckons that it could also be a consequence of employers recommending not to use public transport.

The proportion of staff on furlough in construction companies for the first two weeks of July was 17%. This was down from 21% in the last two weeks of June. Although it is somewhat positive, it represents the slowest decline in the last month and a half. Luckily, construction’s current furlough level is close to the 16.7% that is average across all industries.

For the very first time since the lockdown started, construction output was up by 8.2% in May 2020. Galliford Try, one of the UK’s leading construction firms, faces the future with confidence. Despite revenue and profit margins taking a hit, the company confirmed that productivity is now close to normal.

Although many lockdown restrictions have been lifted, the reality is that the pandemic crisis is far from over. The UK still needs everybody’s collaboration to minimise the spread of the virus and the impacts of COVID-19 in society.

Has COVID-19 impacted your construction project? Let us know how in the comments below.

 

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