Coronavirus: Scots construction firm calls for more clarity to help embattled sector

Advance Construction Scotland says many companies are fearful over the future. Picture: Murdoch Ferguson.

The warning comes as it emerged that the UK construction sector has suffered its largest job cuts since 2010 as economists warned that the industry is “stuck in quicksand and sinking further”.

Advance Construction Scotland, which has more than 1,600 staff, believes the failure to publish a timescale for furlough payments has left many companies fearful over the future.

Seamus Shields, who established the family-owned company 25 years ago, is calling on the UK and Scottish Governments to look at an emergency funding package similar to that announced for the hospitality and tourism sectors.

The firm says the UK and Scottish governments need to look at an emergency funding package for the sector. Picture: Murdoch Ferguson.

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He deemed the current situation “unprecedented,” adding: “Our company is working across more than 200 live construction sites and has a payroll stretching to seven figures per week. We also have 500 sub-contractors and over 2,000 companies on our supply chain who all depend on us. Nearly all work has ceased instantly.

“The job retention scheme was welcome news at first – but the lack of detail is staggering. The claims system will apparently be open by the end of April but no one can tell us when payments will be made after a claim is entered. In the meantime, banks are providing little clarity to the sector on how we can maintain cash flow to ensure staff wages and contracts can be paid.

Clarity

“People’s rents, mortgages, food and utility bills – all of these payments rely on the sector urgently being given the certainty it needs. We need that clarity now.

“All of us recognise the demands on government – but extreme pressure is being placed on the industry and my fear is that if some companies collapse, then others in the chain will soon follow.

“Any decision we take to furlough staff has to be made with the knowledge of how claims will be handled by government and precisely when the payments will arrive.”

Meanwhile, UK construction firms reported their fastest downturn in activity for almost 11 years after measures to stop the spread of coronavirus halted work and caused a slump in new orders, according to new data.

The IHS Markit/Chartered Institute of Procurement & Supply (Cips) construction purchasing managers’ index (PMI) dropped to 39.3 for March, from 52.6 in February.

Analysts had forecast that it would be a reading of 44 for the month, according to a consensus from Pantheon Macroeconomics.

The three largest areas of the construction sector all posted declines, with the civil engineering industry the hardest hit, according to the survey.

Tim Moore, economics director at IHS Markit, said activity has fallen to the greatest extent since the global financial crisis. “The closure of construction sites and lockdown measures will clearly have an even more severe impact on business activity in the coming months.”

Duncan Brock, group director at Cips, said: “With no upturn in sight, and with the fastest level of layoffs since September 2010, the sector is stuck in quicksand and sinking further.”

He added that there will be no sites to work in or staff available. “The brutality of this impact cannot be underestimated, and the sector has not hit rock bottom yet.”

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