What will the economic impact of coronavirus be on the construction industry?

What will the economic impact of coronavirus be on the construction industry?

It’s certain that coronavirus is having a devastating economic impact, with some nations even contemplating putting their economies into hibernation. Of course, construction – long an indicator of an economy’s health and dynamism – will be heavily impacted through this period. Therefore, future planning is absolutely essential, even in the face of such incredible uncertainty.

Pressures the industry currently faces

In the short term, the construction industry faces substantial challenges as a result of lockdowns all over Europe and the rest of the world. Although some projects have been deemed essential, others have had to substantially scale back or halt their operation. Of course, this has a significant impact on budgets and timelines. A further challenge is insurance companies’ willingness to pay out on project interruption policies. Certainly, the industry needs to show resilience under the current conditions, but it’s likely to be the longer-term impact that’s worrying industry leaders.

The long-term impact of coronavirus

The Economic Institute for Construction estimates that approximately 40,000 jobs could be lost over the next two years as a result of coronavirus. Overall, the institute projects that production could shrink by over 15%, signalling a more severe crunch than the 2008 crisis. This is potentially due to a drop in demand as a direct result of measures brought in during lockdown. For instance, analysts think there is potential for the UK government to redirect investment away from transport infrastructure projects towards broadband.

Shoring up the industry against coronavirus

It’s certain that the coronavirus crisis is going to have a dramatic effect on the construction industry and wider economy. Industry leaders need to throw all their weight behind future planning to nurture resilience and, subsequently, a managed transition out of the crisis.

Naturally, this is easier said than done. A key approach is to upskill and cross-skill workers to manage staff shortages on essential sites during the lockdown, and from here, account for skills gaps that occur in the future. Streamlining will be a further essential strategy. To prove the industry’s efficiency in the face of changing priorities, we will need to get more done in less time.

Either way, coronavirus is an unprecedented, potentially world-changing crisis. Future planning is critical to the survival of numerous firms and the strength of the wider economy.

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