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Early signs of recovery in construction

James Hughes, Managing Director, Sphere Solutions

The drastic impact of COVID-19 has caused severe disruption to the employment industry across the UK, but Sphere Solutions, a prominent recruitment business specialising in the construction industry, have reported some encouraging signs of recovery in the market.

Sphere, who operate from an office network throughout Wales and the South West of England, are a key supply chain partner to many regional and national civil engineering firms, building contractors and residential developers.   The business had started the year with confidence and were on course to confidently deliver a record year.  However, as the coronavirus pandemic took hold, James Hughes, Managing Director of the business, needed to drastically alter these projections.  In the space of two months, the enormity of the change meant that instead of expecting growth, the average annual turnover could actually be reduced by as much as a third. 

Mr. Hughes commented: “We established the business in 2005 and managed to successfully navigate the 2008 recession, but the effect of COVID-19 on both our business and the industries that we serve have been more profound than anything we have experienced before.  It took 15 years to build our business to where it is today, but just 15 days to see a drastic impact on the industries we serve.”

The restrictions enforced by lockdown measures caused a drastic slow down on construction sites, and the demand for staffing across the UK.  By the 1st April, permanent job placements had dropped by 82% and temporary placements by 75%.    Fast forward a few months, and with construction sites now moving towards a new normal and capacity increasing week by week, there is an increasing level of confidence that the construction industry will see a re-surge in activity, and that the labour market in turn will move again.    

The CPA (Construction Products Association) recently forecasted that construction output could drop by 25% this year, but that we could see a re-surge of 26% in 2021, which would bring about the V shape’ recovery that many had hoped for. 

The optimism on the market beginning to return is shared by Mr. Hughes, as he added: We have seen some positive signs in recent weeks with the permanent market returning to around 40% of its previous position throughout July and continually improving.   We are also seeing the temporary market getting back to around 60%, with a steady 7% weekly increase on average.   It is a case of steady but cautious optimism, but the early signs are hopeful that next year could bring about a sharp return to previous levels.”     

A key consideration for the industry to recover at speed, will be the confidence that personnel can maintain safety measures on site.   This concern led to Sphere collaborating with Swansea based Green Hat Consulting to launch CovCert, a recently announced safety awareness course, designed for the construction industry. 

Despite the challenges brought about by the pandemic this year, Sphere aim to continue their growth intentions, with plans, with plans to expand their own team further. The business is confident of a swift return to similar or higher than average activity in 2021, with Mr. Hughes concluding: “We have an excellent group of people, who have worked extremely hard during these challenging times.  We feel that with the right stimulus in the economy, we can take what will be a tough 2020, and plan for future growth in 2021.”