Coronavirus impact on construction

Coronavirus impact on the construction sector

Authored by Kelly Burton

Kelly Burton

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Approximate read time: 3 minutes

The UK’s construction sector is often vulnerable to changes in the economy, and as with many sectors, has seen the impact of the coronavirus.

How has coronavirus affected the UK construction industry?

As with many sectors, the UK construction industry suffered during the pandemic.

Site managers have had to make changes to limit chances of the virus spreading on-site; allowing social distancing, enabling work (such as admin and meetings) to be done from home where possible, and ensuring workers aren’t coming on-site if they show symptoms.

Additionally, there’s been a 35% drop in productivity across the sector; the result of additional restrictions on workers and delays up the supply chain. This loss of productivity is costing companies hundreds of thousands of pounds and delaying projects.

Even with the Coronavirus Job Retention Scheme, many businesses, both directly involved, and connected with construction, have seen their cash flow become unbalanced.

The effect on finishing teams

With projects delayed at the earlier stages, there has been a knock-on effect on ‘finishing teams.’ Finishing teams are those involved in the final stages of the construction process. These include industrial roof contractors, mechanical and electrical contractors, cladding suppliers and fitters, plasterers, and dryliners.

Is there help available?

Fortunately, there are a number of help schemes available for businesses in the construction sector struggling to cover their outgoings.

Company recovery

If your business is struggling with large levels of debt, coronavirus related or otherwise, there are several recovery options available.

Limited companies can apply for a Company Voluntary Arrangement (CVA), allowing businesses to repay a portion of their debt in monthly instalments tailored to what they can afford.

A similar arrangement is available for sole traders called an Individual Voluntary Arrangement (IVA).

Administration is also an option, for when companies face higher levels of debt, which may require restructuring to resolve. An insolvency practitioner (IP) takes control of the company, protecting it from creditor action for the procedure’s duration.

More information on company recovery

Company closure

Sometimes a company can have such high levels of debt that recovery isn’t an option. In which case, it may be best to liquidate the company. A Creditors Voluntary Liquidation (CVL) allows an IP to close the company in an orderly manner, and potentially provide creditors with a higher return than would be provided if the company was wound up.

More information on company closure

Government support

While the Coronavirus Job Retention Scheme ends on October 31st, 2020, there are other government support schemes available. The Coronavirus Business Interruption Loan Scheme (CBILS), for example, allows UK businesses to borrow from accredited lenders.

Alternatively, businesses can apply for the Bounce Back Loan Scheme (BBLS); where they can borrow up to 25% of their turnover, from £2,000 and up to £50,000. Bounce Back Loans are guaranteed by the Government and are interest-free for the first year.


The UK construction sector has felt the impact of the coronavirus, same as much of the economy. Large contractors and finishers have seen a marked impact on their cash flow. Fortunately, we offer help to struggling companies and sole traders. This could involve entering a formal repayment arrangement, putting a company into administration, closing the company through liquidation, or utilising one of the Government’s coronavirus business support schemes.

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