Annual review and industry forecast for 2021.

Question is: where to begin? We know where to end, but how do you begin to look back over the past 12 months with anything other than…sheer puzzlement?

It wasn’t just the start of a new year, but a new decade as well. Many leading industry experts were looking far into the future. Brexit had dominated all three of the previous annual previews. The industry’s prevailing mood had been one of deep uncertainty and trepidation. Firms had just been hoping to survive the political and economic volatility. But 2020 was being approached with a sense of cautious optimism. 

I believe you know the rest.

Home builders did manage to push ahead with new projects during October, making the construction sector one of the few bright spots in the UK economy as tiered lockdowns began to take effect across the north of England and Midlands.

With the services and manufacturing sector suffering a sharp slowdown, building firms continued to bounce back from a contraction in spring that followed the UK coronavirus lockdown.

With most firms crediting the government’s cut in stamp duty on the sale of new homes for boosting demand, new orders increased at the fastest pace for almost five years and the outlook for residential home builders remained strong, the IHS Markit monthly health check of the sector found.

However, construction industry managers warned that while firms were better placed than they were earlier in the year, after government clearance to work through the current lockdown in England, a backlog of work that kept many construction workers in full-time jobs during summer was beginning to wane.

Firms indicated that job cuts during the summer would continue through autumn and reduce the industry’s overall level of employment, though the rate of job shedding was slower than in the second quarter of the year.

A third consecutive month of shrinking activity across the civil engineering industry also dragged on the broader construction sector’s growth and showed the government’s efforts to improve the nation’s infrastructure and an agenda to “build back better” was struggling to make headway.

The contraction in civil engineering and a dip in growth in commercial office building meant the IHS Markit/Cips construction total activity index fell to 53.1, from 56.8 in September. Any number above 50 signals growth.

The index, which has registered above 50 in each month since June, was bolstered by a reading of 62.4 in house building, though this was slightly lower than the level in September. Civil engineering activity fell to 36.4.

Tim Moore, the economics director at IHS Markit, said: “Survey respondents commented on renewed economic uncertainty and concerns about the sustainability of the recovery as pent up demand begins to wane.”

Duncan Brock, Cips’ group director, said some of the momentum from the past few months “leaked away” in October.

“The largest blot on the landscape was the number of redundancies and job shedding reported by construction firms, though builders remained relatively cheerful about the next 12 months,” he said.

“The strength of the pipeline of new work especially from a robust housing market means the sector is moving in the right direction and hopeful of getting through the winter unscathed.”

It hasn’t been all doom. A number of theatre workers who lost their jobs when the coronavirus crisis forced live venues to close are retraining to insulate and upgrade homes as part of the fight against climate breakdown.

Stage hands, technicians and joiners from theatres and live venues across Manchester and the north-west are using their skills to retrofit homes in the region, installing insulation, fitting windows and upgrading heating systems.

The scheme was set up by Andrew Glassford, 29, who had worked as a sound engineer before the pandemic hit. He said: “I am really proud and pleased with what we have achieved, just for the fact that I have been able to get my friends work that is meaningful, that helps them but also helps tackle the climate crisis.”

Glassford set up the Retrofit Get In initiative in September when he joined forces with Red Co-op – a cooperative that specialises in retrofitting buildings. So far about a dozen former theatre workers have been employed but he hopes to expand the programme and establish a formal training scheme for unemployed theatre staff.

“We have had people insulating the loft, removing a floor, insulating walls, putting in a bay window,” he said. “They have done all sorts of things they would not necessarily have thought they have the skills to do with a little bit of guidance and help.”

Alan Tierney, 34, who worked backstage at the Lowry theatre in Manchester for 16 years is one of those involved. “What we have done so far I would never imagined – fitting windows, insulating walls and the loft, putting in floors … it is really interesting and rewarding work.”

The fledgling scheme has no government or council backing, although Glassford hopes that once politicians realise its multiple benefits – from helping people back into work to reduced emissions – they will support it.

On 23 December, UK business secretary Alok Sharma wrote an open letter to the industry about remaining open under the then tightest restrictions. He said: “I want to be clear that, as before, firms and tradespeople in the construction sector and its supply chain, including merchants, suppliers and product manufacturers, can continue to operate in tier 4. I also want to reiterate, that where it is essential to travel between tiers to get to your work or for the purposes of carrying out your work, you are able to do so.”

He added: “I want to reassure you that the government appreciates the invaluable contribution your sector is making. Whether delivering on large or small construction sites, and in peoples’ homes across the country, in builders’ merchants, designing and project managing schemes or producing construction and mineral products, you are making a major contribution to the economy.”

At the time of writing, prime minister Boris Johnson unveiled new rules for England including an instruction to “stay at home”, warning that the new variant of the coronavirus makes it much more likely to be caught and passed on. People are allowed to leave home to work in occupations including construction, new guidance states. Builders’ merchants are also permitted to continue trading during the lockdown.

Restrictions already in place in Northern Ireland, Wales and Scotland also allow construction activity to take place.

The questions will continue apace throughout the year it seems. It is expected that consumer confidence will go up when a Covid-19 vaccine comes out and that this will lead to a rise in the number of individuals undertaking construction projects. Hopefully, a vaccine will help to get the country back to normality and lead to a reduction in the current restrictions which hold back productivity.

There are also predictions of increased public sector investment in 2021, particularly in road schemes, to help underpin the ongoing recovery of the construction industry. There are suggestions that 2021 will see an increase in school building projects as councils seek to reduce the nation’s shortage of available secondary school places. There have also been promises made about increases to NHS capital funding which is expected to lead to the advent of more building projects. The Government has further promised to boost investment in infrastructure and there is an expectation that civil engineering projects disrupted by lockdown this year will recover in 2021. In addition to this, major schemes, such as the £4 billion Thames Tideway Tunnel project and HS2, are expected to boost Great Britain’s civil engineering output over the next couple of years.

Our message here to all readers is simple: stay safe. We wish you the very best for 2021.