Sector fell by 5.9% during the month as covid-19 sends economy into reverse

Gross domestic product fell by 5.8% in March alone as the country saw its biggest quarterly fall since the depths of the financial crisis in 2008.

Today’s figures are just the start of the expected covid-19 slump.

They reveal that the 2.0% fall in the first quarter of this year was the largest drop in GDP since the last quarter of 2008 – when the collapse of Lehman Brothers triggered a worldwide financial collapse. The March drop is the worst since ONS records began in 1997.

google cranes

Dozens of sites including the Google HQ building at King’s Cross in London were shut because of the pandemic

Construction shrank by a record 5.9% in March alone and during the first three months of the year was down by 2.6% - the largest decrease in quarterly growth since the second quarter of 2012 where it shrank by 2.9%.

The figures confirm the impact of the lockdown imposed by the prime minister on March 23 which saw hundreds of sites forced to shut down.

Construction’s problems began in February with bad weather, which saw large parts of the country under water following heavy rainfall, helping send the sector down by 2.1%. The month was the wettest since Met Office records began in 1862.

Private commercial work during the first quarter was down 5.3%, while private housing new work was down 4.2% and private housing repair and maintenance down 7.5%.

All types of work fell in March, the first time this has happened the ONS said. There were record monthly declines in both repair and maintenance, down 5.1%, and new work which fell 6.2%.

Private new housing and private commercial were the largest contributors to the slump in new work, falling by 6.4% and 7.1% respectively.

The figures underline what chancellor Rishi Sunak said yesterday when extending the government’s furlough scheme by four months to the end of October, that a UK recession was “already happening”.

Last week, the Bank of England warned the UK economy might contract by 25% in the April-June quarter while the economy this year could shrink by 14%.

>> Also read: Government suspends housing market


Latest: Housing market ‘reopens’ and planning consultations go digital

Estate agents can reopen for business from this morning and house viewings in person will now be allowed as the government looks to get the housing market moving again.

Other measures include reopening show homes and letting removal firms get back up and running.

And housing secretary Robert Jenrick said housebuilders will be allowed to keep sites open for longer in order to stagger builders’ arrival times and ease pressure on public transport so they can meet social distancing protocols.

Jenrick said: “This critical industry can now safely move forward and those waiting patiently to move can now do so.”

The moves, which only apply to England, come after the market all but ground to a halt in the wake of the lockdown introduced by Boris Johnson seven weeks ago.

The scale of the crisis facing the industry was underlined in recent provisional analysis by the Construction Products Association, which said that housebuilding activity has slumped by 85% during lockdown.

Other initiatives announced by Jenrick include allowing local councils and developers to publicise planning applications through social media instead of having to rely on posters and leaflets.

However, while publicity and consultations can now be conducted virtually, the government has not responded to repeated requests from both planners and developers that it extend planning permissions due to expire during lockdown. There are fears that permissions may lapse while contractors are unable to get on site, with clients forced to suffer the expense and delay of re-applying.