Fuel use shows that the UK construction industry has recovered from the pandemic

Fuel use shows that the UK construction industry has recovered from the pandemic

Fuel use shows that the UK construction industry has recovered from the pandemic

With the UK preparing for a new normal we can look back over the last 12 months to see what effect the pandemic had on Britain’s transportation to provide a barometer for the wider effect on Britain’s businesses.

The construction industry, perhaps more than any other industry, gives us an insight into the overall health of the UK’s economy. Construction projects were one of the key industries that for the most part stayed open during the two lockdowns – construction projects, especially on highways, often cannot be delayed and since workers are working almost entirely outside social distancing is far simpler than office-based industries.

As a company that distributes and administers fuel cards for the UK’s businesses, we have a good perspective on how much fuel each industry sector is consuming, and therefore whether the UK’s economy is returning to normal. Unlike, say, retail or hospitality, very little can get done in the construction industry without the consumption of fuel – usually diesel. We know, for example, that if we see fuel being purchased from our fuel card data then the construction industry is working.

So, what does the fuel data that the pandemic has produced show us about the British economy and the transport industry over the last 18 months?

The dominance of diesel

Overall fuel usage almost halved from 190 million miles travelled to 94.3 million between March and April 2020. This was one of the steepest declines we saw for any industry, but the return to near pre-pandemic levels of fuel usage was also rapid – by July of 2020, the industry was using nearly as much fuel as they had been before the pandemic.

The decline was particularly steep when we look at petrol usage versus diesel – petrol use was down almost two thirds between March and April 2020 while diesel use was down by less than half. So why the discrepancy in fuel type drawn? While petrol is typically used in smaller vehicles such as cars, diesel is used in larger vehicles such as vans, Heavy goods vehicles (HGVs) and construction vehicles. As most construction work was deemed essential over the course of the pandemic diesel-powered vehicles, construction equipment and generators were still in use, while non-essential travel for business meetings, which typically happens via petrol-driven cars, was stopped.

Diesel is by far the most used fuel in the construction industry, with over ten miles travelled by diesel for everyone by petrol (173 million miles in May of 2021 versus 15.3 million.) Although at 192,000 miles travelled in the same period it is still very much a niche concern, we are seeing a rapid increase in the use of alternative fuels, mainly battery power. However, while other sectors can expect an all-electric future the construction industry, particularly the heavy construction industry associated with the building and maintenance of the country’s roads and highways, is likely to be slow in its uptake of electric vehicles. While cars and increasingly trucks can be powered by electrical motors, construction equipment is more difficult to power electrically and being manufactured in smaller quantities means that companies are likely to take on the easier and more profitable task of creating electric cars and trucks first. Lastly, while smaller vehicles are affected by the government’s ‘Road to Zero’ strategy, construction vehicles are exempt, meaning that there is less pressure on construction companies to change before the 2030 cut-off.

In other sectors, such as transportation, we saw the use of petrol ramp up during the pandemic as companies found ways to, for example, make deliveries with petrol-driven vans rather than HGVs. In the construction industry this trend did not play out – there is no way for construction companies to replace a steamroller with a smaller, petrol-driven alternative, so diesel remained the most common fuel used throughout.

The future for construction businesses

March 2021 saw a record-breaking spike in diesel fuel usage in the construction industry, with 198 million miles travelled, beating a previous record of 190 million. This did not come about through any change in the rules governing lockdowns, but more through a release of pent-up demand throughout 2020 causing a surge in activity. Since then, diesel fuel usage has remained in the low 180s and high 170s, which seems to be the industry average.

Although the last year has been tough on businesses, as they have had to acclimatise to the restrictions put in place throughout the pandemic, activity has in no way ground to a halt for the construction industry. Because it is such a vital part of the economy the industry the impact of COVID-19 lasted only three months, from April to June of 2020. By July of that year things had returned to business as usual, with the expected dip in December and a welcome bumper month in March. Overall, we have seen that the industry is extremely resilient and has weathered the storm better than many other sectors.

Article by Paul Holland, Managing Director for UK Fuel at FLEETCOR.

Post source : Allstar Business Solutions Limited

About The Author

Anthony has worked in the construction industry for many years and looks forward to bringing you news and stories on the highways industry from all over the world.

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