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Coronavirus: UK construction firms axe jobs at fastest pace in a decade

Tom Belger
Finance and policy reporter
Construction workers' health is at risk from continued work amid the coronavirus pandemic, campaigners warn. (PA)

UK building firms are slashing jobs at the fastest pace in almost a decade, suffering a steep downturn in work as the coronavirus ripples through the sector.

A closely watched survey of construction leaders showed the fastest monthly decline in employment numbers since 2010 and in levels of business since 2009.

New orders slumped and work stopped on many sites as the outbreak took its toll on activity, ending a fragile recovery since December’s election boosted confidence.

Analysts said it pointed to the worst economic downturn in a century, coming alongside separate figures on Monday showing UK consumer confidence and new car registrations collapsing.

The headline figure on a purchasing managers’ index (PMI) for the sector plummeted to 39.3 in March from 52.6 in February. Figures above 50 show growth and below 50 show decline on the index, based on a survey carried out by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS).

Read more: UK government under pressure to halt construction work

Duncan Brock, group director of the CIPS, said builders “lost their jobs on a frightening scale” as the lockdown to contain the pandemic hobbled firms. “The sector is stuck in quicksand and sinking further.”

Civil engineering, commercial and residential work have all taken a hit. Housebuilders have suffered the least damage so far, but expect their work levels to collapse.

The UK property market has been knocked sideways by the pandemic, with estate agents forced to furlough staff as activity has collapsed. Coronavirus fears have not only stopped in-person viewings and valuations, but also battered confidence among buyers and sellers. Growing job losses and tighter lending conditions are also likely to hit the market in the months ahead.

Separate analysis released by Knight Frank on Monday pointed to a sharp decline in UK residential property sales in 2020.

The estate agent and consultancy predicted sale numbers would drop 38% on 2019 levels to 734,000 transactions this year. But it only expects UK house prices to slide 3% in 2020, and predicts they will recover sharply in 2021.

But Andrew Wishart, UK economist at Capital Economics, said the PMI data indicated Britain was set for the sharpest fall economic output in a century in the second quarter of 2020. “More confirmation that social distancing is obliterating economic activity,” he wrote in a note to clients.

Read more: Rising UK house price data ‘irrelevant’ as lockdown batters property market

The latest figures come amid enormous controversy over continued work on many construction sites, despite the government’s lockdown and advice to stay at home.

The government has ordered non-essential retailers and venues to close, but has not restricted most other businesses’ ability to continue to trade and order staff into work.

Construction firms have been given the go-ahead to continue with projects, as long as social distancing guidelines such as staying two metres apart are followed.

But construction workers, unions and opposition parties are urging the government to introduce further restrictions. They warn conditions on some sites and commuting prevent workers staying apart, putting their own and their families’ health at risk.

Many workers face a stark choice between risking their health and losing their jobs or income by staying at home. Some housebuilders and other construction firms have voluntarily ceased work, however.

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