Challenges Faced by the construction industry due to the Pandemic
COVID-19 impacted the construction industry in multiple ways, including new health and safety measures, supply chain issues, and a halt to planning and inspection timetables. New Government guidelines, childcare issues, and social distancing rules made commercial construction challenging to continue as well as many other construction projects.
During the Pandemic
When the government first introduced social distancing and restrictions to combat the spread of COVID-19, few industries better symbolised the resulting confusion than the construction industry. Sites closed or remained open on an apparently arbitrary bases, and rumour and counter-rumour circulated about which contractors were closing their sites.
The impact of the COVID-19 pandemic is causing extra productivity losses of around 15% on UK construction sites. The virus has triggered programme delays and spiralling costs that have increased the sector’s performance problems. An analysis of 45 different projects delivered during the pandemic showed that labour shortages combined with the impact of social distancing is the cause of around 7% of productivity losses. Many projects will get extra labour in to catch up when a project is behind schedule, however during the Pandemic this is not an option due to social distancing and workers on furlough who cannot work by law.
According to the Site Operating Procedures (SOP) released by the Construction Leadership Council the site work does not have to stop if the 2m rule cannot be maintained safely, however if it can’t the importance of affected tasks need to be considered. Unfortunately, these guidelines meant many commercial construction sites had to be temporarily closed as they were not considered essential enough to warrant the safety risks.
National lockdowns and the closure of borders had a deep impact on construction supply chains. Coronavirus halted production of goods due to factory closures and workers in quarantine, which then depressed production longer term and delayed shipping. As well as this, China was the single largest source of imports for the UK construction sector in 2018, accounting for 16% of the total. This meant when China also shut down many factories in response to Coronavirus it led to shortages of products and an increase in prices.
Coronavirus caused projection completion delays of up to 32 weeks, by definition this is going to have an affect on new projects starting and the profitability of projects which have been delayed. By working with a leaner structure and removing ‘process waste’ where possible the construction industry needs to act quickly to reduce costs and increase productivity.
The Construction Products Association estimates that construction output will fall by 25% in 2020, this has a huge knock on effect on the economy, with the largest falls in activity in private housing
by -42%, commercial construction output has reduced by -36%, and private repair maintenance & improvement by -35%.
The UK Government has announced how important they view construction to boost the economy. In a speech in June, the Boris Johnson underlined his commitment to ‘build, build, build’ in order to upgrade Britain’s infrastructure and skills to fuel economic recovery across the UK. The goal is to create new jobs, infrastructure and improve healthcare through a national programme, and the Spring 2020 budget included billions of pounds in grants to increase construction of infrastructure. Costs and delivery time are likely to increase as a result of lost productivity from implementing social distancing. This will erode low margins further, and only add to cost pressure that firms already face, making investing in the future less desirable and harder. This highlights the importance of Government investment to boost the construction sector.
The industry recovery plan to restart, reset, reinvent is a 2- year plan with most of the recovery happening in 2021. At RG Group our goal is to continue our career progression for our staff in order to maximise skill sets and keep all projects ongoing with minimal disruption. Contact us to discuss how we can make your project successful here.