Construction firms ‘hardest hit’ by Covid lockdown

WHEN people consider the sectors in greatest crisis due to the coronavirus pandemic, the most obvious casualties have been in tourism, hospitality and aviation industries literally brought to a standstill by lockdown.

But figures released by the Welsh Government have shown that firms in the construction sector have made the most applications for emergency support from the Economic Resilience Fund – with more than a quarter of the 10,000 requests of support.

The applications – mainly from SMEs – total about £40m and show the impact the crisis has had, with building sites either closed or operations curtailed.

With concerns that social distancing could now be with us for the foreseeable future, there are fears about the viability of some contracts given the often tight margins and tough deadlines.

Owain Williams, from Williams Homes (Bala), said: “As an industry the construction sector is used to dealing with risks.

“However, the problem we are currently facing is that the increase in management costs needed to make sure we adhere to Covid-19 rules is making it impossible to make money on sites.

“These sites were priced at preCovid rates, not only are management costs higher, but we are finding that sites have approximately 50% less operatives on them, which will make deadlines impossible to hit and will cause liquidated damages to be leveraged against the contractor.”

They said their own clients had been understanding but feared for other builders.

They added: “We will be fine as we have exceptional clients, mostly north and mid Wales housing associations, so they are very understanding.”

They said other private-sector clients may not be so understanding and also use delays as an excuse not to pay fully.

Chris Wynne, managing director of Wynne Construction, Bodelwyddan, said: “It’s been a difficult time for the sector as many construction companies closed sites to allow for planning and managing a safe reopening in line with government guidelines.

“We are now back working but at a reduced output as a result of reduced numbers to support the implementation of social distancing.

“Another problem has been sourcing materials.

“Another concern is there will likely be a drop in the number of apprentices and trainees entering the industry.”