Career & Jobs

What Does COVID-19 Mean for the Construction and Development Industry?

The construction and development industry is considered to be essential work under most new government lockdown legislation. Let’s take a look at what that means in practice:

How Construction and Development Were Affected in 2020

Like the majority of sectors, the construction and development industry has been affected by the coronavirus pandemic, particularly by the various lockdown measures taken across the UK, Europe, and the US.

For example, the start of lockdown in the UK (March and April 2020) showed an unprecedented decline in activity. Since then, the trajectory has been as up and down as the lockdown rules themselves. In May 2020, when lockdowns were first lifted, construction production saw a 22.2 percent increase. Although construction production did continue to increase over the following months, it did not improve by much. In September 2020, the sector suffered once again, showing a 2.9 percent decrease from the previous month. By September, activity in the sector had only recovered to 95.7 percent of its pre-crises level.

How Will New Lockdowns Affect Construction?

The construction sector experienced an initial lull in 2020 as sites were forced to close and many builders were placed on government furlough. However, the sector did manage to recuperate toward the end of the year. It is no coincidence that this recuperation occurred around the same time the housing market reopened and home improvement projects were able to get off the ground. Looking forward to 2021, the sector will likely remain busy, at least in certain countries. According to the latest lockdown guidance from the UK government, for example, construction work can continue. This includes building work on renovation sites and self-build sites, as well as construction work in people’s homes. Any pre-agreed projects can go ahead, and new construction projects can be contracted. Tradespeople are permitted to work, and stores selling building supplies are allowed to stay open.

The Housing Market During COVID

The housing market has fluctuated wildly during the pandemic. After spending more time confined to our homes, many have opted for home improvement projects, while some have been compelled to make a move. Certain areas have experienced surges in housing demand, such as coastal towns and commuter belts. At the same time, certain areas of London and other major metropolitan areas have become like ghost towns.

Unlike the first lockdown of March 2020, the housing market remains open in the most recent lockdown restrictions, and people are still permitted to go ahead with moves. This will hopefully cause less disruption to the housing market overall than the events of 2020 caused. The looming deadline of the stamp duty holiday announced by the UK government will no doubt affect people’s willingness to move as well, with many hoping to buy before the end of March.

What Impact Did COVID Have on Development?

No site visits were possible during the first lockdown, meaning that many development projects were shut down. Those that went ahead participated in a large-scale adoption of digital technologies to launch and plan new property development projects — a trend that looks to continue in the future. That being said, the pandemic caused hundreds of redundancies when the sites were forced to shut down. This makes a rapid recovery for this side of the sector unlikely. Along with redundancies, there have been many salary cuts, too. It is unclear whether these jobs will be recuperated once property development starts up again.

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