How COVID-19 has Affected the Construction Industry


The outbreak of COVID-19 has already reached more than 200 countries across the globe. However, the sudden infection has not only affected the humans but also the entire construction industry across the globe. Though there are no good numbers related to direct impact or contagion at sites, a drop in the spending made on construction projects during the past few weeks has made it evident that the construction industry will have to bear the impacts.

Even if the impacts are not direct, the projects which have the permissions to continue with the work will suffer due to the disturbed flow of manpower, money, and the market. This situation demands an immediate need for slowing down the operations and taking necessary steps according to the information rolling out from the authorities.

However, the situation of damage or loss to business could be controlled with effective documentation, and keeping a check on data using tools like ERP accounting software with project management capabilities.

Here we have a list of the most significant effects which COVID-19 is likely to reflect on the construction industry.

Safety & Health

Safet and Health

The primary concern of the construction firms in the areas affected is all about the safety and health of the employees. Even though the risk of contagion is low for any industry outside healthcare, construction firms are working to encourage hygiene at the sites. Some of the common practices which have been adopted are:

  • Prevent touch to the face
  • Frequent cleaning of hands
  • Practicing social distancing

Apart from this, the next major concern which has affected the work on the construction site is the rise of anxiety and fear amongst the workers. However, the anxiety is natural since the rapid increase in cases and laws on travel and work may make it difficult for workers to show up affecting the projects. Above all, the strict laws related to licensing will make it tough for construction firms to find replacements for specialty contractors who provide electrical workers or mechanical staff.

Supply Chain Issues

Supply Chain Issues The next big reason for which construction firms may have to struggle is supply chain issues i.e. shortage on the supply of material. Especially, those firms which we were highly dependent on other countries for the import may face delays in the deliveries.

For instance, most construction companies in the United States were dependent on China for the supply of stone, steel, and other essential construction material. Therefore, it is very natural that lack of supply will impact certain construction firms from large to small due to shortage of material, the rise of available stock prices, and the delay of the deliveries. covid19-affected-construction-industry The third possible effect which will turn to be a nightmare for many construction brands would be anxious clients and lenders. This will simply lead to loss of investment which will directly lead to uncertainties with the project.

Another reason for the loss of finance apart from anxiety could be an investment made on safety and risk planning. Considering the current situation, it is evident that every industry or project under progress is likely to face delays. Though switching to the insurance companies could help, it needs an intense understanding of the possible conditions in which maximum claims could be acquired.

Restrictions on Business Travel

If we look at the global situation, the construction firms which operate at the world level are highly concerned about one big issue i.e. travel-related restrictions or bans. The inability of the companies to reach their construction sites may lead to a halt on construction projects.

Even if the businesses who have control from the cloud with the technologies like Microsoft Dynamics 365 Business Central, it needs extensive monitoring of the digital process through powerful cloud-based technology.

For smooth control over the accounting, ERP, and client management for construction companies, get ProjectPro!

Legal Concerns

The spread of COVID-19 is more of a natural calamity but the situation may still hold construction companies responsible for any delays with the projects or added cost overruns. This is because of the terms and conditions which justify the right of client and contractors concerning schedules, delays, substantial deliveries, and other provisions. However, lawyers can help construction firms to have the benefit over force majeure conditions depending on the jurisdiction and laws established. But still, construction firms need to prepare them with essential documents and data to deal with any opportunistic claims.

The Crux – Drawing The Solutions

When it comes to the construction business, everything revolves around costs and the duration. However, the sudden outbreak of the coronavirus has left the construction firms bounded to the unpredictability. This is because of the no information on the size of impact and the time for which it is going to last. But still, working on a few little steps will help deal through the situation with minimal loss to the health and revenue.

  • Implementing strong health practices at the unrestricted construction sites to avoid any chances of infection.
  • Expediting the available resources or finding alternatives to the material to continue the construction until the pandemic situation lasts.
  • Planning with the contractors and clients about the cloud practices and Tele-meeting options to continue with the projects.
  • Be prepared with documents related to costs, taxes, bills, and other essential details that could help take benefit of force majeure.
  • Last but not least, monitoring the situation for future uncertainties and scheduling accordingly.

Good Luck! Take Care!

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