As the Covid-19 outbreak worsens across the UK, with the government imposing strict quarantine measures, several construction firms have announced they will take precautionary measures and close sites. Others, however, remain open in line with government guidance.
As the number of people infected by the Covid-19 virus in the UK reaches close to 15,000, construction firms have taken measures to halt the spread of virus. The government announced strict lockdown measures on 24 March, with Prime Minister Boris Johnson urging people to stay at home and only leave to buy essential goods or for work. Several construction firms announced they would close sites in response to the virus outbreak. Housebuilders, Vistry Group and Taylor Wimpey announced earlier this week they would temporarily halt construction projects and close their sites.
However, a number of firms announced they would continue work amid the worsening conditions. Crest Nicholson, Balfour Beatty and Berkeley all announced they will keep their building sites open and follow the governments guidelines on social distancing. The mayor of London, Sadiq Khan, has called on the government to order the closure of construction sites, stating it would be impossible for workers to follow the prescribed guidelines.
Several construction firms have seen a significant fall in their share price since the end of February. Taylor Wimpey’s shares have plunged by 41% since the end of February and announced on 24 March that they would suspend dividend payments to shareholders. Similarly, Vistry Group has seen its shares plunge by 55% since the end of February and has also announced it will suspend dividend payments to shareholders to preserve liquidity.
With conditions in the construction industry set to worsen in the coming weeks, GlobalData expects the industry to contract by 2.5% in 2020, a significant fall from the 0.9% increase recorded in 2019. The forecast is dependent on the virus being contained by the end of the second quarter. In view of the latest developments in the sector and further disruption to projects expected, a downward revision of the forecast is likely.