The Construction Products Association (CPA) has just forecast a 25% drop in construction output for 2020 in the UK due to Covid-19. And this is the optimistic prediction! It blamed the decline, which is said to be the sharpest ever recorded, on the country’s coronavirus-related lockdown. 60% of planned construction output was lost in April 2020 due to social distancing measures. This compares to a 6.5% decline in gross domestic product (GDP) forecast for 2020 by the International Monetary Fund (IMF) in April 2020 for the UK. OneStone Consulting’s Joe Harder in his Covid-19 Impact Analysis CIC 2025 report has forecast a 12.7% decrease in European cement production. Readers should keep in mind that construction output, GDP and cement production are all connected but not necessarily directly related.
Further details of note from the CPA include a direct link between the strength of lockdown measures and work lost, as well as differences between types of activity. So, for example, more construction output (in percentage terms) was reported lost in Scotland, where tighter lockdown measures were implemented. On the latter point, more output was lost in residential construction compared to non-residential with a similar trend reported in the repair, maintenance and improvement sector, again worsened in the residential part of this market. The sector that suffered the least was non-residential repair and maintenance as work on, currently, mostly deserted buildings and infrastructure was prioritised. One example of this may have been Aggregate Industries, the UK subsidiary of LafargeHolcim, which said this week that it had completed major works on the A14, a major regional trunk road, ahead of schedule. It didn’t directly make the link in its press release but quiet roads would have helped.
The CPA is touting the now-familiar range of letter-shaped economic recession shapes in the report, including ‘V’, ‘W’ and the dreaded ‘U’. However, the CPA’s Economics Director Noble Francis was more confident that infrastructure projects would bounce back fastest due to favourable investment cycles in utilities, government support for its high-speed railway scheme HS2 and, “greater ability to implement safe distancing for workers on larger sites.”
That last point ties in nicely with the operational guidance that the Mineral Product Association (MPA), the UK’s trade association for the heavy building material sector in the UK, released last week. This is all crucial information on a comprehensive and detailed scale along the lines released in other countries.
Much of this will be becoming second nature to cement industry workers and/or will be familiar to anyone who has watched US consultant John Kline discuss these issues on Global Cement Live. Yet there are some points worth discussing here such as ‘Avoid Distraction.’ This one’s all about remembering to keep in mind existing health and safety practices alongside all the coronavirus-related ones. All the usual health and safety regulations and advice remain in place and in some ways become even more important as there may be fewer staff working on socially-distanced sites, or first responders may be otherwise busy elsewhere. Another point from the MPA’s guidance is to ‘Provide More Time,’ which acknowledges that working with coronavirus measures will require more time. Other implications from a business changed by coronavirus are things like notifying the police when sites are closed and considering further security for such sites to minimise risk of theft. A lot of this stuff seems obvious but it’s easy to miss things.
For a recent review of the UK cement industry readers should refer to Edwin Trout’s feature in the June 2020 issue of Global Cement Magazine. One change since it was published has been Cemex’s proposal to mothball its 0.8Mt/yr South Ferriby integrated plant in Lincolnshire. The cement producer says it is not related to coronavirus but if the CPA’s predictions are accurate then it will make it that much harder to keep the plant open.
Everyone’s hoping for a ‘V’ shaped recovery from the coronavirus downturn in the UK and everywhere else around the world. Boots on the ground operating advice like that issued by the MPA and others is part of how the construction materials industries can work towards achieving this.