Covid-19 and construction

Various BCIS surveys* suggest that site productivity has reached 85% of pre Covid-19 levels as contractors gain experience in implementing the Site Operating Procedures**

The surveys also indicate that productivity might reach close to 90% of pre Covid-19 levels.

The pandemic’s impact varies across the trades, for example, early trades and infrastructure, where working is mainly in the open air, are less affected.

There are real costs resulting from the Covid-19 Site Operating Procedures, hard costs of welfare facilities, transport and increased programmes, which should be reflected in preliminaries, but these do not currently seem to be reflected in tenders as thus far most major contractors are absorbing this impact.

There is also anecdotal evidence that restructuring, the adoption of greater contract risk management, extended hours and shift working has improved productivity for some contractors and the situation will continue to evolve as companies adapt to new ways of working.

However, the pricing pressure has ramifications, which tend to be amplified as they move down the supply chain and affect suppliers. The renewed lockdown and the potential disruption from Brexit may require suppliers and subcontractors to hold more stock.

Looking forward the construction pipeline will start to reflect Government priorities with renewed investment in housing and infrastructure. In both these sectors the pandemic may accelerate a shift to off-site manufacture and increased use of technology.

The competitive environment will put pressure on cash flow especially in the lower tiers of the supply chain, with a record number of profit warnings issued this year, notably in the building materials subsector,  it will be important for clients and contractors to support their suppliers wherever possible.*BCIS regular surveys

• TPI Panel – Quarterly Delphic survey of a panel of consultants
• Private Housing Construction Price Index (PHCPI) – Quarterly survey tracking changes in housebuilders construction costs.
• Contractor’s Tender Climate Survey CTCS – Quarterly enquiry of contractors

The surveys provide input BCIS indices and are reported in BCIS online services.

For further details of these surveys or to take part contact BCIS at contactbcis@bcis.co.uk

**Construction Leadership Council Site Operating Procedures – Version 6, October 2020