News: Construction across the South starkly divided

Posted on 8th October 2020

A national survey of construction companies published by Worthing and Gatwick-based chartered accountants MHA Carpenter Box, alongside their national association MHA, reveals a stark divide in how construction companies in the South East and beyond have fared during the COVID-19 crisis.

In line with national trends, almost half (49%) of companies said the impact of COVID-19 has been substantial; 44% stated it had had only minimal impact on their business; and only 5% described the damage was critical. Future expectations also showed a divide, with almost a third reporting that business activity was now back to normal, while 30% believed it would take over a year to return to pre-pandemic levels.

The biggest concern, shared by 61% of respondents, is economic uncertainty. Supply chain disruption also ranked high on the list of worries, mentioned by 45% of respondents, with 32% concerned about cashflow, which reflects the industry’s strong balance sheets, low debt risk and improved turnover pre-pandemic.

Other findings:

  • 81% have made use of the furlough scheme, with seven in 10 planning to bring back all furloughed staff
  • Close to a third (32%) have had to make redundancies
  • 68% have used the VAT deferral scheme
  • 47% reported it was easy to access government funding

Commenting on the results of the survey, Robert Dowling, Head of Construction and Real Estate at MHA and MHA Carpenter Box, said: “Construction businesses in the South East have generally adapted well since lockdown was lifted. They are managing sites to ensure activity can continue, whilst adhering to social distancing measures by spreading workforces around sites.

“Inevitably there are delays and completion dates are being put back, which in turn is expected to have some impact on funding by increasing the cost of capital.

“The future however is very uncertain. Government projects are now the most likely source of revival for the sector; housebuilding, although currently buoyed up by strong demand is likely to suffer from a rise in unemployment; and commercial building is unlikely to thrive, with many companies questioning whether they need as much office space as before.” 




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