Covid Impact on Construction Industry

1. Covid Impact on Construction Industry

2. Covid Impact on Construction Industry The pandemic had a significant impact on India’s real estate sector as well as the growth of the construction industry. Every other area of the global economy did poor. The construction industry and real estate sectors have recovered more than most. According to a report on 99 Acres.com, India’s building industry growth has lost close to INR 1 billion since the pandemic began. For many real estate developers and the construction industry, there was a lack of funds. Due to factors like loan, residential sales in India’s top seven cities fell from 4lakh units in 2019–20 to 2.8lakh units in 2020–21. The entire construction industry and residential demand fell by more than 40% in the first half of FY21. The growth of the construction industry is recovering. Not that COVID-19 is no longer a factor or that the world is free from its impact. The industry, on the other hand, has learned from the first and second waves and is better prepared to tackle the virus while continuing to conduct regular business.

3. Covid Impact on Construction Industry One of the most key criteria of the country’s real estate recovery and construction industry growth is housing sales, which have surged by 71% in India and are 90% higher than pre-COVID-19 2019 levels. A Money Life.in article claims that the Mumbai Metropolitan Region (MMR) won this competition by selling a sizable 76,400 units. Hyderabad saw a huge 197 percent growth in sales from 8,560 units in 2020 to 25,410 units in 2021. Pune has proven to be a strong opponent, with sales increasing by 53% from 23,460 units in 2020 to 35,980 units in 2021. But why did this increase occur during or after the pandemic that caused every business and every person on the planet to experience a financial low point? Let’s look at a few impacts of Covid-19 on construction industry.

4. Covid Impact on Construction Industry Impacts of COVID-19 on Construction Industry Supply chain management In various ways, the supply chain has been disturbed around the world. Many materials used in the construction industry are needed, due to lockdown; these products are not getting to the construction site from outside, which is slowing the construction process. The many materials that come from various industries inside the nation or overseas via various vehicles for the construction sector cannot come. Due to the inability of all vehicles to arrive at lockdown, the required materials are not coming, which causes the work to be delayed.

5. Covid Impact on Construction Industry The factories that manufacture all of these supplies are also losing a lot of money because these are not being sold which has not only caused the construction industry to fall but also damaged the livelihoods of people who carry these materials by vehicle. Transportation problem Due to the nationwide shutdown, all modes of transportation have been affected. Because of this, no materials are getting to the construction industry, and no employees can commute to work from home. The work stopped as a result. Labor shortage First, the department is entirely closed down, making it impossible for workers to get to their places of work. Second, because the disease is a viral condition, employees are more likely to catch it when they come into touch. As a result, many workers refuse to report for duty. Furthermore, it is impossible to force employees to work without any form of protection.

6. Covid Impact on Construction Industry Financial problem Due to the work stoppage, companies are not making any kind of profit; on the contrary, more losses are being incurred. Not only is the company losing money, but all of the suppliers who provide the necessary materials to various companies for use in the construction industry are also suffering major losses. Since the company’s downfall, the companies that make the materials have stopped manufacturing and the supply chain has been shut down, causing multiple losses of them. Additionally, the government is unable to properly collect taxes from these locations due to the closure of the construction industry and the non-sale of factory-produced goods, which has a direct impact on the GDP of the nation. When the GDP of the nation drops, it has an impact on the global economy.

7. Covid Impact on Construction Industry Contractual implication problems The “Force Majeure” provision serves as its basic foundation. This clause lists a number of rules, “Large Scale Epidemic” being one of them. The COVID-19 pandemic falls under this heading. Different contractors placed their unique tools in various locations for use in construction machinery, but due to the lockdown, all of these tools have been lying there for a while. The companies have contracts with the contractors to work with all of these tools in exchange for a fee, and if the contract contains a “Force Majeure” clause, the contractor will not be compensated by the agency for delay. When contractors stop working, there is significant financial loss as a result. •

8. Covid Impact on Construction Industry Unemployment Due to this shutdown, businesses are experiencing huge financial losses. Because of this, businesses are struggling to pay their employees properly, which results in the company firing a large number of employees. Many people’s jobs have been taken away as a result of this. In addition to them, their families are suffering greatly as a result of their job losses. Overall, a worrisome situation has developed. Factors Driving Construction Industry Growth The transition to electric transportation will require investments in new plants, battery manufacturing facilities, and charging infrastructure. These are just a few of the impacts of Covid- 19 on construction industry.

9. Covid Impact on Construction Industry Conclusion The COVID-19 epidemic has had a severe impact on society greatly. Each nation’s economy and society have both been impacted. Because of this, work in the construction industry has stopped, and the workers there are also dealing with a lot of uncertainty. Therefore, a financial recession is affecting building enterprises. To put an end to the financial crisis, businesses must resume operations. Therefore, everyone should resume work in accordance with the instructions provided by the WHO and the government. For the benefit of its employees, construction businesses must take the appropriate corrective measures. Want to learn more about the Real Estate & Construction industry? Visit www.addindiagroup.com to get more insights.