Coronavirus: Construction sector most significant part of new shutdown
Much of manufacturing to remain open, but more offices and local services will also close
The construction sector employs not far off 150,000 people directly and a significant number will now have no work. Photograph: iStock
Another significant part of the economy is to shut completely for at least the next two weeks – including most of the construction sector and parts of the retail and local services sector not already closed. Some offices which have remained open in sector like legal services and accountancy will also have to close.
However significant parts of the manufacturing sector will remain open. And as the restrictions apply to people travelling to and operating in workplaces, those whose employees can work from home – including many of the major digital companies and many professional services firms – can continue to operate.
The closure of more of the economy, probably employing an additional 150,000 to 200,000 people, has a few significant implications. One is disruption for the businesses involved and uncertainty for employees. If the closure is for just two weeks, the damage will probably be limited – but we just don’t know.
The second implication is increased cost to the exchequer, as many of the employees will either be laid off and put on the emergency Covid-19 payment of €350 a week, or their employers will keep them on and apply for the new income support scheme.
The third point is that cutting more economic activity will have a wider impact as spending across the economy drops further – the companies hit will not be spending on inputs and supplies and their employees will stay home. A large part of the economy is now in the deep freeze.
Companies will be studying the list published late on Saturday which classifies large parts of the manufacturing sector as remaining open. This includes not only pharma and medtech companies and food companies but also significant numbers of ICT companies, data centres and those involved in providing inputs and services to these. Companies providing “ products for the supply chain of essential services” are mentioned,which will cover many other firms. Banks and financial services firm can also stay open.
List of essential workers (final four pages)
There is likely to be significant comings and goings between various companies and government departments in the days ahead about who falls within the category of those allowed to stay open.
There are some which will fall outside the categories mentioned and will have to close, but it appears that most of manufacturing is covered. Much of the professional services sector is already working from home – but lawyers, accountants and those working in insurance can only travel now in support of essential services of vulnerable people. So many offices will close.
Those in the public sector not already working from home are likely to be from Monday, again with some exceptions. The film, arts and sports sectors will also be shuttered.
Most of the non-food retail sector is already closed and now some more will also have to close – garden centres, for example,clothes shops still open and a range of other local service providers, with limited exceptions.
The Government had taken a “ broad and sensible approach”, according to Fergal O’Brien, head of policy at employers’ group Ibec, who said the range of manufacturers remaining opening reflected the complexity of supply chains for the provision of what are regarded as essential services. Businesses would be working over the weekend to clarify their own position and inform their employees, he said.
The Government statement said that the only parts of construction deemed essential were health building related to Covid-19, road and utility infrastructure and the provision of emergency services to businesses and homes. The Government is to inform the sector in relation to what other public projects are deemed essential. The bulk of house and office building sites will close. However building work related to essential industries may also be able to continue.
The construction sector employs not far off 150,000 people directly and a significant number will now have no work. Some, including many agency workers which make up about half the workforce, are now likely to be laid off , while builders will apply for income support for staff they are keeping on. There will be a spin-off, too. Upwards of 30,000 jobs are reliant on the sector as suppliers and product manufacturers and then there are self-employed service providers, such as architects .Much will depend on how long the close down is – and of course on the wider impact of the economic issues created by the crisis.
In a statement the Construction Industry Federation said the sector” is responding to the advice of the Government, which has specifically stated that construction workers should not be in work barring exceptional circumstance.”
Any companies where work is paused due to Covid-19 will avail of the range of schemes introduced by the Government, it said.” Where possible companies will try to keep the link with their direct employees by availing of the temporary wage subsidy scheme where they can qualify for it. Where work is paused indefinitely, construction site workers could be put on temporary lay-off and opt for the Pandemic Unemployment Payment.”