The spread of the COVID-19 virus since it was first identified in China in late 2019 has been rapid and unrelenting. In just a few weeks, the imposition of social-distancing measures and a lockdown by the UK Government has led to mass job losses, furloughing of employees and a catastrophic drop in economic activity.
The construction industry, which accounts for 6 percent of the UK economy and employs approximately 2.4 million people, has been impacted greatly, in common with many industry sectors. While the Government has introduced schemes to support businesses, these will only provide comfort to directors in the short term and do little to assuage their fears about the longer-term viability of their firms. The industry operates with low margins, so most firms will not have a war chest into which they can delve. It is also unknown whether it will be possible to generate positive cash flow at a sufficient margin to fund additional financing costs once the pandemic has passed, because of the possible looming recession.