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April 2, 2020

Uncertain future for construction industry in UK and Ireland amid Covid-19

With several construction firms announcing site closures, project delays and profit warnings amid the Covid-19 outbreak, the outlook for the industry looks increasingly bleak across the UK and Ireland.

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Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
  • IoT value chain
  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
Don’t get left behind – find out how IoT can fortify your operations and make investments now.
by GlobalData
Enter your details here to receive your free Report.

As the virus outbreak worsens in the UK and Ireland, several contractors have announced site closures and project delays to fulfil the governments’ social distancing requirements. The decisions taken by the firms have come with a severe economic and financial cost, with construction output expected to plummet in both countries in 2020. Several firms have also announced that they plan to suspend dividend payments to shareholders to preserve their cash holdings.

It is estimated that approximately one in five construction sites in the UK have been closed in the week since the UK Government imposed lockdown measures and that number is expected to increase further in the coming weeks. Suspended projects in the UK include key flagship government infrastructure projects such as HS2 and Crossrail .

Last week, housebuilders Taylor Wimpey and Vistry Group announced they would suspend dividend payments to their shareholders and several other major contractors took further cost-saving measures. Balfour Beatty ’s executive board members announced they would take a 20% reduction in salaries and postpone dividend payments.

Kier announced it would be cutting salaries of 6,500 employees as a result of the virus outbreak. Meanwhile, Morgan Sindall announced it would suspend work on the £250m ($310m) Sighthill Transformational Regeneration Area in Glasgow, Scotland. The company also warned that its profit for the year will take a significant hit due to the virus outbreak.

In Ireland, a number of projects have been delayed, following the government’s announcement that all non-critical construction sites should be closed. Work has subsequently been suspended on several projects, including the €280m ($306m) Macroom-to-Ballyvourney route in Co Cork. The €110 ($120m) M7 road development project has also been delayed. The projects were run by contractors Jons Civil Engineering and Colas .

Given these project delays experienced so far and more set to be announced in the coming weeks, GlobalData expects the construction industries in the UK and Ireland to be both severely disrupted by the ongoing lockdown measures.

The UK’s construction industry is set to contract by -2.5% in 2020, while in Ireland the industry is expected to expand by only 1% this year, following a solid year in 2019 when output expanded by 5.8%. The forecast is contingent on the virus outbreak being contained by mid-2020 and the lockdown measures being lifted. However, if the health situation deteriorates and lockdown measures are prolonged and intensified, there is scope for further revision to the forecast.

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Free Report
img

Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
  • IoT value chain
  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
Don’t get left behind – find out how IoT can fortify your operations and make investments now.
by GlobalData
Enter your details here to receive your free Report.

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