Plastic drainage manufacturer Polypipe is the latest building products manufacturer to announce redundancies as a result of the economic situation due to the Covid-19 pandemic and lockdown.
The 250 jobs will represent around 8% of the workfrce, though there are no plans to completely close any facilities.
In a statement released this morning (July 7), the company said the “regrettable but necessary steps to adjust our manning levels and cost base” are in response to the 24% year-on-year drop in revenue for the six months to June and the latest forecasts from the Construction Products Association, which show that residential new build demand in 2021 is likely to be 20% lower than 2019 levels and commercial demand 18% lower than last year, even with recovery in the second half of 2021. “Medium-term economic and industry forecasts show a significant impact from the COVID-19 outbreak on both the wider UK economy and specifically the UK construction industry,” the company said.
On the upside, however, the group said it had seen improving trends since its update on 7 May, with June revenue 30% below 2019 levels compared to 66% below in April.
The company’s commercial and infrastructure systems business has remained “relatively resilient” throughout the period, with contractors managing to return to operations, albeit at reduced productivity levels, although recovery in the residential systems segment has been more subdued, reflecting the shutdown of the new house build market for much of April and May, followed by a more measured return to work.
“We are encouraged by the group’s performance in May and June compared to April and also by reports of better than expected activity in the housing market after its reopening on 13 May 2020, as well as Government-announced increased levels of investment in infrastructure projects.
“However, at this stage we remain cautious as to whether this performance will be sustained into the autumn and winter.”
Polypipe currently has 25% of its workforce furloughed, down from 61% at the height of the crisis.
The manufacturer said it was currently manufacturing at all main sites at varying levels of capacity utilisation, and currently has 25% of its workforce furloughed, compared to 61% at the height of the crisis.