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Economic Development

South West construction industry contracts in grip of Covid pandemic

RICS' Q3 report shows work slowed on the region;s building sites with financial and supply issues also key

Construction work on a hotel development in Plymouth city centre(Image: Penny Cross / Plymouth Live)

The South West’s building sites have become quieter as the construction industry grapples with the effects of the coronavirus pandemic and a shortage of materials, a new report reveals.

The RICS South West Construction and Infrastructure Survey for Q3 2020 shows that construction workloads fell during the past three months, with infrastructure and private sector commercial and industrial projects most affected.

But growth expected from upcoming public house-building and infrastructure projects buoy the sector’s chances of a recovery, the survey said.

While cross-sector workloads fell by a net balance of -7%, this is less than the previous fall of -37% in Q2. However, when compared with last year’s industry average of +14% it shows construction in the South West is far from full recovery.

Simon Rubinsohn, RICS' chief economist

Breaking down across each sector, workloads fell across the private commercial and private industrials categories with net balances of -36% and -29% respectively. Respondents also reported a fall in workloads for infrastructure and private industrial projects – but this is offset by net balance increases for private (+19%) and public housing (+10) projects.

Respondents said that financial constraints and shortages of materials, coupled with insufficient demand, were the main reasons given for the subdued activity.

Looking ahead, more respondents expect new growth in infrastructure and public housing projects, and private housing and other public works schemes are also expected to continue, rising in the coming year and offering the construction sector new hope as the South West recovers from Covid-19.