Coronavirus ‘costing construction £237m a day’
The coronavirus lockdown and the consequent interruption of construction projects is costing the industry £237m a day.
That’s according to estimates by the Centre for Economics and Business Research (CEBR) thinktank, which has tried to calculate the economic impact of coronavirus on the UK economy.
The CEBR warned that construction was among a number of industries, alongside accommodation and food services, to be “disproportionately impacted” by the crisis because so many people in the sector are unable to work from home.
The study by a CEBR team led by economists Daryn Park and Owen Good considered the lockdown through 105 major industries and estimated that it is leading to an overall reduction in economic output of 31%.
Construction’s gross value added (GVA) to the economy is calculated to be 50% down on pre-crisis levels. GVA is a measure of the contribution to GDP made by an individual industry. According to the Office for National Statistics, construction output in the UK in normal times is estimated to be more than £110bn per year, making up around 7% of GDP, although a recent CIOB study said the industry’s economic influence is double that.
Other industries are even worse hit. The manufacturing sector is set to see the highest gall in output, according to the CEBR, with a group in GVA of £500m per day. Accommodation and food services is down £172m a day (79% of pre-crisis levels), and non-food retail is down £156m a day (55%).
The news follows calls last week by the Construction Leadership Council (CLC) for”emergency” support from government to help stave off business failures in the sector. The CLC’s full proposals can be found here.