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The Building Blocks of Recovery

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When the world economy went over the cliff edge in March/April, construction was as badly affected as any other sector. Now, as what seems to be a Perm and Temp vacancies by sector July 2020more rapid recovery than the pessimists were predicting (of which more below), we’re seeing different areas of the economy running at different rates.  Unsurprisingly, given the huge demand for distribution/delivery personnel, the BlueCollar sector is leading the charge, followed fairly closely by healthcare and, to my surprise the Hotel and Catering world, where both perm and temp vacancies have staged a massive recovery. 

Overall, recruitment has been and continues to be suppressed, but the major change over the last few months is that the uptick in volume, in both perm and contractor markets, is continuing, as per the two tables here. For construction/engineering, the big rise is in the contractor market, with firms looking to more flexible/contingent resourcing to get them through the crisis.

We’re seeing something similar at Peace, with more client activity and, crucially, significant growth in our June/July web traffic compared to the previous two months.  My view is that construction CEOs and MDs need to hold their nerve as redundancies mount in the wider economy over the next few months.  A key part of our recovery is going to involve a vast increase in the supply of affordable housing, while you don’t have to be a genius to see that the property market is going to pivot towards more conversion of high streets to residential/shopping zones. In an ideal world, successful trials of vaccine will be announced and we’ll see a real acceleration and change in business sentiment.PMI Services July 2020

Construction does not, of course, exist in a vacuum, so it’s doubly encouraging to see the the
IHS Markit PMI index returning to the crucial ‘above 50’ level in July, largely
on the back of a resurgence in services (see right).

This does suggest we are on course for a V-shaped recovery, although I suspect that it may be halfway between a U and a V.  Optimism helps drive growth and it is still possible we might just come through this better than I thought a few months ago.  

Chris Peace, MD, Peace Recruitment

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