UK construction’s path to recovery remains uncertain

A recent Barbour ABI report commissioned by Hire Association Europe (HAE) has shown that the UK construction industry saw a strong recovery in June, as lockdown measures were lifted, but that recovery is likely to slow.

The construction industry analyst’s Regional Analysis of the Construction Equipment Rental Industry, Autumn 2020, suggests that construction output increased by 24% in June.

Overall, in June construction output remained 25% down on February’s figures.

This is against the backdrop of a severely impacted UK economy, which contracted by 20.4% in the second quarter of 2020, following a 2.2% contraction in the first quarter of the year.

Although the economy rebounded with 8.6% growth in June and about one third of the lost output has been recovered so far, there remain major uncertainties and risks, according to the report. Social distancing restrictions continue to weigh on activity.

The peak to trough total fall in output was -24.6%, and to the end of June the economy was 17.2% smaller than in February.

The report says it is now apparent that the UK has experienced a larger contraction than other developed nations, such as France (-14%), Italy (-12%), Germany (-10%) and Japan (-8%).