The Office for National Statistics (ONS) has this morning reported that the UK economy grew by 15.5% in the third quarter of the year. This growth comes as a small but welcome recovery from the record-breaking 19.8% decline seen in June, especially as this improvement was seen in all sectors of the economy, including services, manufacturing and construction.
However, with a second lockdown in place, it is important to note that this growth may once again see the economy suffer from the closure of non-essential businesses. Despite this, the continuation of trade in the construction sector will prove to be the backbone of the economy during these concerning times. The construction and trade sectors have seen particular growth following the lift in the spring lockdown according to PMI data, and this upward trajectory is expected to continue.
Powered Now, a mobile-based billing, invoicing and quotation application which specialises in trades, has a client base of over 1500 SMEs, and has seen first hand the impact COVID-19 has had on businesses within trade sectors.
Ben Dyer, CEO of Powered Now, discusses how British construction and home improvements will fare in the winter and highlights the impact the second lockdown will have on SMEs in the trades.
“The economic recovery we have seen in this morning’s announcement is indeed welcome, but of course with much of Britain in a state of national lockdown over the month of November, this month and the subsequent winter season are of course going to present yet more challenges. That’s why it would prudent to look towards sectors that remain open, such as construction and the trades, to provide the kind of stability we need at the moment.
The new restrictions have had a negligible impact on the construction sector so far, and overall activity around construction has to be welcomed. Given the bonanza that housebuilders are currently experiencing from the stamp duty reduction, it’s no surprise that they are the best performing sector of the construction industry. Whether this boom for the housing industry will be followed by a bust is unknown. At the moment, most firms are just grateful for the good business they are getting right now given how much other sectors are suffering.
It is disappointing that the supply of building materials remains a constraint and it could be argued that suppliers over-reacted to the first lockdown, creating this situation. The reduction in the rate of PMI growth seen last week could be the first signs of a drop in demand from lockdown related macroeconomic damage. Let’s hope that isn’t the case.
However, it looks like the new restrictions have not impacted the specific sub-sector of home improvement either, although the jury is still out. It may be that homeowners become more anxious over time, particularly if the virus continues spreading rapidly. The biggest concern overall is about the supply of materials. Fortunately, at the moment the indicators are that the shortage is easing.”