The global construction industry has been under intense stress in recent months amid the COVID-19 crisis and associated containments measures to prevent the continued spread of the virus. Even in countries where the construction industry has been permitted to continue, being exempt from restrictions on general business activity, there has still been widespread disruption and temporary shutdowns of construction sites. Reflecting the severe impact on the industry, provisional data for some major markets in Europe reveal that construction output plummeted in April during the peak of the pandemic in the region, with Italy recording a 68% year-on-year drop, and France a 60% decline. Such unprecedented declines are expected in other markets that have seen construction work grind to a halt.

General Global Business Sentiment according to GlobalData

The Plight of Construction and Real Estate Industries 

The construction and real estate industries are certainly not exempted from the global and regional economic disruptions. Due to existing inventory levels, short term impacts on ongoing construction activities have been minimal. With threats to employment and economic growth, there is deteriorating confidence in investments which can leave adverse effects in the long term.

Experts point out how China and Italy largely contribute to the hospitality, residential, and commercial projects in terms of supplying luxury interior materials. However, as businesses rethink their procurement strategies due to changing consumer trends, there will be an inevitable slowdown in factory operations and a larger focus to source locally. To add to that, countries such as India have closed a large number of steel plants. There will be a global surge in demand when these factories open for normal functioning. This will most likely add pressure to these industries and therefore, leading to long term impacts.

The question at hand remains, are all long-term ramifications on the regional construction and real estate industry at a disadvantage?

Concerning the real estate demand in the UAE, it is safe to say it is a valued and robust industry. It offers excellent value across select developments. Investors will be able to take advantage of projects by offering discounted prices, leaseback options, and other incentives during this time. The Abu Dhabi government has also waived off real estate registration fee of 2%. This might increase transaction activity as residents currently renting will find it more affordable and lucrative to purchase their property.

Post COVID-19 Strategies for Real Estate Projects 

 As the world adjusts the new normal, some strategies will shape the real estate industry post-COVID-19. New methods such as integrating improved artificial intelligence and carefully analyzing infrastructure qualities will help this industry grow.

Although industries have taken a massive hit from the monetary downfalls due to economic standstills, certain government’s efforts are starting to pay off as several

Post COVID-19 Strategies for Real Estate Projects 

 As the world adjusts the new normal, some strategies will shape the real estate industry post-COVID-19. New methods such as integrating improved artificial intelligence and carefully analyzing infrastructure qualities will help this industry grow.   Although industries have taken a massive hit from the monetary downfalls due to economic standstills, certain government’s efforts are starting to pay off as several  industries are now on a path to fast-track recovery. The real estate industry, in particular, is heading towards a new direction in terms of market demand.

• Post COVID-19 periods will also see a rise in demand for lower-density properties and locations. Rethinking design to maintain social distancing standards will become top priorities for developers.
• Building layouts will see major revamping by the allocation of extra spaces and designs that adhere to safety aspects to add value.
• In addition to new design standards, builders also need to focus on the quality of infrastructure. Industry leaders need to commit to high-grade materials and carefully assess conditions that will stand out to their stakeholders.
• An aspect that was becoming prominent much before the dawn of COVID-19 was the concept of artificial intelligence. With time it has gained traction and has enabled buyers to experience properties without physical visits. An example of this is Smart Investment Map (SIM) which the Real Estate Investment Management and Promotion Center, the investment arm of Dubai Land Department has launched to attract major investors for off-plan available projects. SIM is an online portal serving Dubai Real Estate Market; specially designed for real estate professionals to list their properties for sale and rent in Dubai. SIM provides public with a number of e-services allowing them to search for properties listed for sale or rent, communicate with property owners, brokers and management companies and complete sale transactions online without the need for multiple visits to Dubai Land Department. Another example is the DubaiNow application which offers access to over 85 city services that include bill payments, NOL, fuel top-ups, property finding and much more. This app has a rating of 3.7 on Apple iStore.

If companies and developers focus on following these strategies, both them and the industry will recover from the hit it has taken because of the COVID-19 crises within no time. As the new normal are here to stay, all industries need to start opting to the new normal planning strategies as well.

Zooming in on the Construction Industry

With economies crashing and projects coming to a halt amidst the COVID-19 lockdowns, let us take a closer look at the impact on the construction sector.

The outbreak and subsequent spread of COVID-19 has drastically changed the course of construction projects all around the world, including the Middle East. Different projects will experience delays, disruptions, and cost escalation.

Construction Industry and in particular projects schedules have seen dramatic changes in last couple of months. From the beginning of March, the construction industry began to experience much higher levels of project delays and cancellations due to the COVID-19 pandemic, with widespread restrictions on the movement of people and enforcement of complete or partial lockdowns from mid-March. The impact during the month of April and beginning of May was at its peak with approximately 15-20% of projects were either cancelled or delayed; however, since mid-May the overall situation has improved. The share of delayed projects out of all projects updated fell to around 2% by mid-June. In the USA for example, the Associated General Contractors of America (AGC)’s latest survey found that nearly one fourth of contractors reported a project that was scheduled to start in June or later had been canceled.

Keeping in mind the brutal blow economies all across the globe are facing, measures had to be in place to ensure project delays did not inflict widespread damages. In the light of the dramatic fall in oil prices in the UAE, it is yet to be seen what economic effects we will be facing due to the novel coronavirus. The fall in the market may have repercussions on liquidity and cash flow throughout the construction sector. It is particularly prevalent in this region where ‘pay when paid’ clauses are permitted and often seen in subcontractors.

The smooth flow of funds in the construction sector is going to be taken up by banks, which will allow contractors and companies to dodge the constant problems of delayed payments. With banks being open to extending repayment terms, liquidity is less of an issue to contractors.

As a response to the current situations owing to the COVID-19 virus, banks in the UAE will ease construction sectors’ payment issues. UAE banks’ exposure to the construction industry is estimated at 15% plus.  The UAE Central Bank is also required to be more lenient on payments due from clients. Banks have received orders to give more flexibility on loan paybacks, and any transactions clients have with the banks and easing pay for contractors become a top priority by banks.

With many industries being vulnerable to the impacts of the virus outbreaks, construction projects are some of the most vulnerable sectors. The UAE has about $710 billion of building and civil engineering projects currently planned or underway. There would be revisions once the full impact of the COVID-19 impact is understood.  All the issues of the construction industry have been brought forward with the pandemic. We need to be thoughtful about the problems every sector is facing. The mobility of labour is not the only hindrance. Delays in exporting or importing goods, materials, plants, and equipment owing to travel bans and lockdown may consequently impact the progress of construction projects everywhere. Delay in projects is bound to happen. There are no two ways to it. We need contracts that allow the smooth functioning of the industry without anyone getting into disputes. This is why banks need to step up and further ease their procedures as their plan of action during these trying times will be reflected deeply in future provisions.

Investment and Adaptability to Digital Transformation

The construction industry has evolved over the years in the way they design, plan, and build structures. Technology makes construction projects more efficient and safer. It also makes room for more innovation. Adopting artificial intelligence can help optimize work schedules, improve workplace safety, and keep a watch on facilities.  From small scale projects to multi-year and large scale projects, machine learning is excelling at finding patterns in data. With the help of pattern recognition and historical data, artificial intelligence has time and again proven to help better manage schedules. It can help prevent costly delays amongst suppliers, vendors, and everyone involved in the process.

The same pattern detection deployed to schedule time can be used to look for common trends in projects. Many sites use artificial intelligence to run through contingency plans. The technology can assess what might happen if a permit is delayed or an accident occurs, forecast outcomes of multiple scenarios and even anticipate breakdown. This exercise can help develop contingency plans to tackle unexpected situations.

The use of autonomous devices, drones, and robotic construction workers is also on the rise. Drones help in surveying and taking overhead images of construction projects. Robots help with various mundane tasks such as bricklaying, concrete pouring, or installing drywall. Such devices help cut labour costs and keep the project on track with regards to time.

Advanced data intelligence also increases safety. Construction is not without hazards. Potential on-site risks such as dangerous structures and moving equipment that poses a danger to humans exist in every construction project. Artificial intelligence helps contain or completely eradicate the possibility of these hazards to occur. Sites are also equipped by cameras and sensors that monitor several aspects of construction operations. Advanced systems are capable of detecting unsafe behaviour and alerting teams of potential hazards. They not only reduce liability but can also help save lives and increase efficiency.

Surveillance systems are not new to workplace environments. Keeping an eye over the projects and sites is an added level of security. Investing in expensive equipment can help companies monitor footage and spot suspicious activities.

Enabling and adopting artificial intelligence has delivered incredible results and is being deployed by more and more construction companies with each passing day. Assessment of the results shows artificial intelligence can help in cost savings, time savings, and overall improvements in construction projects.

An example of a country that is putting digital transformation at the forefront of the construction industry is Australia where a collaboration between 30 partners including universities and the CRC (Australian government’s Cooperative Research Centres Program). The scheme, called Building 4.0 CRC, is focused on cutting delays, emissions and waste from building projects has received a grant of 28 million Australian dollars ($16.40 million) from the country’s government. The objectives include harnessing digital technology and off-site manufacturing to cut project costs by 30%; reducing construction waste by 80%; and lowering carbon dioxide emissions by 50%. “Our vision is to create a world where people can visualize and realize buildings in real time. The purpose is to transform the way that consumers and builders design and buy buildings by providing easy-to-use browsing-based software that allows them to custom-design, visualize and price buildings in an engineering compliant way,” said  Gavin Tonn who is Australian CEO of the Donovan Group, said in a statement.

The Dubai Development Authority (DDA) has also taken a number of steps to mitigate the impact of COVID-19 on the construction sector. These have included:

• The announcement of a Planning and Development Stimulus Initiative.3Under this initiative: (i) the payment of Final Building Permit Fees are split into four instalments4; (ii) the payment dates of fines issued by the Planning and Development Department are postponed for three months; (iii) zoning exception fees are now payable within 12 months rather than six months; (iv) additional or modified built up area fees are now due within three months instead of one month; (v) the issuance of Conditional Completion Certificates (undertaking letter) will be free of charge for three months from the date of the initiative; and (v) the validity period for any Building Permit, Fit-out Permit, Temporary Construction Permit, or Permit to Work within a “right of way” will be extended by an additional three months without charge.

• The introduction of virtual inspections of construction sites.5 Sites can now be inspected at various stages of a project by way of either a Zoom or Microsoft Teams video call, without inspectors having to be physically present on site.

Investment needed for Health & Safety

In most cases, lockdowns may have caused a delay in project completion, not complete shutdowns. Projects that continue their work at sites now have to take extra precautionary measures to ensure the safety of the workers.

Employers may need to review their health and safety policies and protocols and adhere to Government regulations in the context of COVID-19. Safety measures such as maintaining social distancing, sanitation, and providing protective equipment such as masks need to be kept in check by employers for those at the construction sites. Other measures, such as providing remote working facilities to office staff and improving the delivery of information about disease prevention on-site, have also been implemented.

Employers need to focus on medical screening to satisfy care and combating the spread of the virus at these stages. The Occupational Safety and Health Administration Department has updated its guidance to supplement the general terms to accommodate the interim guidance for all workers and employers of workers with potential occupational exposures to SARS-CoV-2. For complete review of the guidance for preparing workplaces for COVID-19, please read our blog: OSHAD & COVID-19.

 

Guidelines around Construction Workers

The demonstrations of precautionary actions such as restrictions imposed on travel bans in most regions are now posing a significant problem to the construction industry. On the one hand, companies are unable to get their migrant workers back due to these restrictions, therefore causing severe delays. On the other hand, we have the strict rules of self-isolation and quarantine that need to be followed to flatten the curve.  Also, labor shortages are resulting in contractors having to pay workers on leave.

 Specific guidelines have been issued by the municipality to ensure the health and safety of construction workers at projects sites amidst the COVID-19 virus outbreak.

The construction sector is one of those industries that has been identified as a vital industry and is exempted from strict movement restrictions in the UAE.

While ensuring normal operations, practicing on-site precautionary measures is crucial for all companies. It is for this reason that the Dubai Municipality’s Health and Safety Department has issued specific guidelines highlighting all the precautions to be adhered to by construction workers across the emirate which we anticipate will continue even post COVID-19 to avoid the spread and risk of infection:

In the UAE, the government announced that construction companies are now permitted to set up or construct labour accommodation on site. This will result in workers not being required to be transported to and from site and will assist in ensuring that social distancing precautions are maintained in existing labour accommodation. It is a requirement that on-site accommodations have enough space to ensure social distancing guidelines are adhered to.

Within Labor Accommodations: The precautionary measures to be followed by construction workers within labur accommodations include frequent disinfection and cleaning, limited gatherings, and social and physical distancing of 2 metres within specific areas. Body temperatures of workers must also be checked before entering and after exiting the premises. If a worker is found to have a high temperature, it is imperative that the worker is placed in isolation and checked for symptoms regularly. In Abu Dhabi, the Abu Dhabi’s Department of Health has undertaken a complete sanitation of industrial areas such as Musaffah and Al Ain Industrial area by testing all residents and isolating infected labors.

All construction workers must practice safe physical distancing within buses. Sanitation must be of top priority, and large on-site gatherings must be avoided. Buses must also undergo frequent, and deep cleaning with government approved products.

The Impact of Changing Consumer Trends on other Industries 

The impacts of the current lockdowns and restrictions have caused a significant effect on the functioning of majority industries. Disruptions in one sector have a ripple effect on other areas as well.  As restrictions are easing in several places, businesses are planning a comeback into the physical working environment. However, there has been a fundamental shift in the way consumers are living, buying, and thinking amidst the COVID-19 pandemic. Even with restrictions lifting entirely or partially, going back to old behaviors and choices will take place over a long period.

Where the Consumer Preferences Lie 

As consumers strive to adapt to new normals, they are also trying to contemplate what these changes will mean for themselves, their families, and society altogether. These concerns are both economic and health-related. Where priorities for hygienic and cleaning staples are increasing, non-essential goods are taking a slump.

These times call in for basic necessities of life taking precedence. There is no surprise that personal health is the top priority for the majority of consumers right now. Other industries like food, financial security and personal safety follow.

A study, based on Google Trends data, showed that searches in the online grocery shopping category reached a peak between March and May 2020 in the UAE. There was a 316% growth in online card payments for this sector in April. Distance learning was another sector that dominated the online search industry. The same study uncovered the surge in online searches for courses online as residents looked to improve their skills and knowledge, making the most of the lockdowns.

Lockdowns and remote working protocols also resulted in a sudden interest in telecommuting. The number of searches for “work from home in Dubai” surged before gradually declining once users became more familiar with remote working processes and tools. The shift to flexible working is one of the main factors driving a higher frequency of online searches for furniture as a need for home office workspaces emerged among residents.

Commuting and travelling

The Abu Dhabi Airport is one infrastructure which has demonstrated how technology can help transform safety measures. Be it touchless sensors, voice-activated technologies, or hands-free switches; every business needs to invest in digital transformation to gain the trust of its stakeholders.

Looking at Abu Dhabi International Airport as an example where many additional safety measures have been put in place to ensure the health and safety of passengers and staff:

• Introduction of strict social distancing rules between passengers and staff and the mandatory use of face masks and gloves
• Airport internal staff have been trained to monitor and ensure all additional health and safety rules are being followed by passengers
• With swab tests, rapid blood testing and temperature checks carried out on site, the airport has also employed external personnel to help man the testing stations each day, including 13 administration staff and nine nurses.
• 53 elevators located within the terminals have been upgraded with contact-less technology, meaning passengers do not have to touch any buttons when calling for a lift.
• Three vending machines containing medical protection kits, including face masks and gloves, have also been placed throughout the airport as well as more than 400 hand sanitizer stations.
• In total, 143 shield partitions have been placed on 71 check-in and immigration counters and several self-sanitizing hand rails have been positioned on escalators in the arrivals and departures terminals.

To conclude the situation of the construction and real estate industry, experts say that the proactive efforts of governments for these industries will ensure business continuity. These measures have also helped contain the damage of the pandemic on investors and agents. Companies and developers can combat losses as long as they start risk planning and implementing improved strategies and technologies. Even though governments are working relentlessly to flatten the curve and contain the spread of the virus, the effects of the pandemic will follow us in the coming months and some changes are here to stay. This is a time for contractors to proactively make decisions that would help in the smooth running of construction projects.

End.

Sources:

https://www.thenational.ae/uae/government/coronavirus-35-000-passengers-pass-through-abu-dhabi-airport-on-limited-flights-1.1030565https://www.nortonrosefulbright.com/en-me/knowledge/publications/0abd48ed/uae-construction-during-covid19-the-impact-of-government-measureshttps://blog.zoomproperty.com/how-smart-dubai-initiative-will-help-uae-real-estate-to-flourish/https://eres.ae/SIM.aspxhttps://www.cnbc.com/2020/03/18/millions-in-funding-for-scheme-looking-to-transform-construction.htmlhttps://www.khl.com/international-cranes-and-specialized-transport/us-construction-jobs-rebound-in-may/144634.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+18th+June+2020&utm_term=C%26Chttps://construction.globaldata.com/Analysis/details/analyst-briefing-impact-of-covid-19-on-construction-project-progress-updated-103442https://www.cbnme.com/analysis/lootah-ceo-outlines-top-5-trends-that-will-transform-uaes-real-estate-sector-in-post-covid-19-era/https://www.cbnme.com/logistics-news/dubai-chamber-analysis-examines-changing-consumer-behaviours-in-covid-19-era/https://www.arabianbusiness.com/comment/446623-how-covid-19-will-change-the-way-we-rent-buy-real-estatehttps://www.forbes.com/sites/forbesbusinesscouncil/2020/04/27/how-is-the-business-world-changing-today/#2e663d3e3972https://www.accenture.com/ae-en/about/company/coronavirus-business-economic-impacthttps://meconstructionnews.com/41879/coronavirus-the-waiting-gamehttps://constructionexec.com/article/four-ways-technology-can-help-the-construction-and-freight-industries-labor-shortagehttps://constructionexec.com/article/what-are-the-top-lessons-your-company-has-learned-since-covid-19-has-struck

Almost all countries and industries are seeing the undeniable impacts of the new coronavirus today. With economic activities at a halt due to quarantine and social distancing laws set by governments, new financial strains are developing every day. The construction industry is not exempted from these impacts. Some of the biggest infrastructure projects have been affected and have been put on hold. The future of the pandemic remains uncertain. The current situation in the construction sector has raised questions over the effectiveness and the validity of contractors’ insurance policies in the time of coronavirus. However, with all the uncertainty, some countries have loosened the restrictions on the industry which has allowed site to re-open following a new standard of normalcy: 86% of sites now open in England and Wales and Singapore is set to re-open its sites on June 2^nd as long as sites are labeled: ‘Covid-Safe and restart ready’

Following Rules: Following rules is particularly important for regions and projects where work has not entirely halted, like the UAE. Strict social distancing regulations need to be followed by workers. Taking place in more open areas as compared to enclosed spaces, it becomes relatively easier to follow these rules on project sites.  Along with ensuring workers wear masks and constant workplace sterilization, social distancing rules need to be communicated to the workers. It would be ideal to maintain 1.5 metres distance between every worker at all times. To make site social distancing successful, one needs to ensure that limited workers are working in one area, and a well-structured work schedule is followed so that there are not too many workers on-site at the same time.  A bonus to all this would be planting sanitisation areas on job sites and encouraging workers to wash their hands frequently. It becomes the employers’ responsibility to provide its workers with ample safety gear as well as make sure the frequency of sharing equipment between workers is reduced.

 

Up safety measures: In the UAE for example, the Municipality has intensified monitoring and inspection of construction sites to ensure all preventive and precautionary guidelines are implemented and instructions in circulars are followed. A total of 50,000 inspection visits were conducted in 12,331 under-construction buildings in the last two months, apart from visits conducted in response to emergency reports in Dubai. Mandatory precautionary measures in construction sites include: wearing protective masks and gloves, providing sterilisation equipment in multiple locations at the site, measuring the temperature of workers before entering the site, maintaining physical distancing and avoiding gatherings, ensuring workers keep a safe distance between each other while travelling in and disembarking from buses, conducting continuous sterilisation of work sites and project extensions, avoiding overcrowding in temporary and permanent elevators, providing dedicated waste containers on site, providing protective clothing for workers in project warehouses, distributing timings for workers’ breaks to ensure physical distancing, ensuring office workers at the site maintain physical distancing, and providing disposable plates and cups. The civic body has issued a set of circulars and guidelines for preventive steps and intensified cleaning and disinfection procedures in construction sites and workers’ accommodations. The Municipality stressed the need to abide by the circulars to ensure the highest security and safety for all construction workers and members of the community. The circulars also include guidelines on transport and movement controls to and from construction sites and the procedures to be followed inside workers’ buses. They also outline the protocols related to the prohibition of workers’ movement outside the project site and the categories within the construction sector that are exempt from movement restrictions

Communication is key: Whether or not your construction projects are continuing during this period, make sure you keep your clients, stakeholders, and staff up to date with the status of the projects. It is not just them who need to be up to date. Construction companies always need to keep updated with policies that are being introduced by their respective governments. Governments are continually working on lessening the impact on industries and reviving the economy.

Being a vital sector, you can rest assured that the construction industries will be presented with policies that could work in their favor and stay up to date.

Risk aversion and a conservative approach: A number one priority for contractors’ would be to preserve liquidity by ensuring the number of unnecessary expenditures is limited. You can limit cash flow in areas ranging from corporate costs to petty cash on projects. The uncertainty from a regulatory and business perspective has prompted companies to make decisions in the short term which has booted the focus on Rental.

Flexible Business Models: Businesses need to adopt agile operating models in the medium term if they want to be resilient. Companies need to replace fixed costs with variable costs for all operations. They can lower base salaries and push variable costs aligned to performance. Regularly revisit decisions over which capabilities should be retained internally and which should be outsourced. Ideally, businesses should retain core activities like project management and control internally but can outsource activities such as secondary support to reduce fixed costs.  

Digital transformation is a necessity: There could be no better time to invest in digital technologies to remain agile and better understand market fluctuations. Advanced technologies can make tasks such as workforce deployment, scheduling, and overall logistics processes faster and easier. They can also play a helping hand in reducing workforce costs. This helps contractors’ become efficient, productive, and less dependent on manual labour.

Fully embracing digital tech in the construction industry seem to be the options contractors and construction agencies will be turning to post COVID-19. This industry is one of the few sectors which have lagged in adopting modern technology. The new coronavirus outbreak has made opting digital technology is now a necessity and less of an option for the construction industry. Traditional construction methods are no longer viable in today’s day and age. The United Nations predicts that the world’s population would jump up to almost 10 billion by the year 2050. This means that the need for housing and upscale construction projects will increase. To reduce the manual workforce, pressure on essential labour, and increase efficiency, the industry needs to keep up with technological developments.

As time passes, both development and innovation are inevitable.

Digital technology has now allowed architects to become more imaginative and creative in designing their buildings. With the increase in the complexity of projects, it would not be viable for the industry to continue with their current methods. It is only by implementing digital technologies will the construction sector be able to complete future projects. Fortunately, increasing numbers of companies recognise the importance of digitisation and how it can transform the industry for the better.  An example of such companies is Italy-based tracked platform manufacturer Palazzani who has called for a greater focus on digital infrastructure, including 5G telecommunications to help stabilise the economy, as it delivers a 52m platform suited for this type of work.  Serena Mingardi, sales and marketing at Palazzani, said, ”The fallout from the Covid-19 pandemic will be severe for the economy of the most developed countries and, consequently, for the whole world. The magnitude of the global recession that lies ahead derives above all from the duration of the infection and from the way in which the financial authorities will respond to the health and social disaster. Mingardi, adds, ”The most direct and effective way to fight the economic downturn remains the construction and maintenance of infrastructures and this is the only solution to stabilize growth, employment, unlock the potential growth and improve long-term competitiveness; the construction of infrastructure increases GDP and creates jobs, while their availability can increase productivity and promote both competition and cooperation.” Mingardi, continued that in particular, infrastructure investments should be directed towards 5G telecommunications, artificial intelligence, ’industrial Internet’, smart cities, education and health care. Di Primio’s Palazzani XTJ52C in Abruzzo model has an outreach of 19.5m, which is being increasingly required in Italy. The main applications are for the installation of 5G masts. The model’s Can Bus system automatically controls movements, leading to time and fuel savings of more than 20%, said the company. 

In addition to using digital for product development, entities such as the CECE – the Committee for European Construction Equipment are using the internet to continue scheduled events and conference. For the first time ever, the CECE will hold a virtual version of its annual congress. In association with the Swedish association, SACE, CECE will livestream its 2020 congress to remote delegates on 8 October, from a TV studio in Stockholm.

New emerging opportunities are increasing in the construction industry with some start ups capitalizing on the need to be online. An example of that is the MENA region’s first electronic store: Rafeeg Store. Rafeeg App founder, Mr.Khamis Al-Sheryani opened this store that specialises in construction, maintenance and decoration projects in the UAE. Through Rafeeg Store, customers can browse the designs of the best international engineers and decorations. They can also easily compare the rates of local contractors who are willing to design their homes. This opening aligns perfectly with the UAE government’s vision to follow through the best environmental practices in various fields, including contracting, maintenance, and design. The online store is now expanding its services in cooperation with a series of trusted international brands to help the market more sustainably in light of the new coronavirus outbreak.

Technology is also being used to improve existing business processes. Indeed, some contractors in Europe as using GoPro technology to film progress on site, which is uploaded to Microsoft Teams to show latest developments, pause and ask questions. In addition, Motion activated voiceover systems are being used to remind people to abide by social distancing on site

 

Hopefully, the ongoing epidemic will end soon. However, the massive disruption caused by the COVID-19 will push companies to adapt into the “new normal” way of business and only those who can adapt will survive.

End.

 

Sources

https://www.cbnme.com/news/dubai-municipality-enforces-building-control-measures-to-boost-precautionary-protocols-against-covid-19/

https://www.khl.com/access-international/palazzani-focuses-on-digital-infrastructure/144255.article

https://www.khl.com/construction-europe/constructions-new-normal/144094.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+21st+May+2020&utm_term=C%26C

https://www.khl.com/construction-europe/cece-announces-dates-for-virtual-2020-congress/144166.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+21st+May+2020&utm_term=C%26C

https://www.khl.com/international-construction/construction-to-resume-in-singapore/144106.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+21st+May+2020&utm_term=C%26Chttps://www.khl.com/construction-europe/86-of-sites-now-open-in-england-and wales/144207.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+21st+May+2020&utm_term=C%26C

In an increasingly fast-moving, complex, and uncertain economic environment, it can be incredibly difficult to make sense of the rapidly changing forecasts provided by individual analysts and commentators – all of which are published at different times and reflect different circumstances, interpretations and scenarios.

To overcome this, GlobalData has developed a consensus-based forecasting methodology for its key macroeconomic indicators, which combines and standardizes inputs from 32 different contributors to provide a concise view of prevailing opinion on future economic performance in any given week. Prior to the outbreak of the coronavirus (COVID-19), GlobalData had predicted that there would be an acceleration in the pace of growth in the global construction industry, to 3.1% from 2.6% in 2019. However, given the severe disruption in China and other leading economies worldwide following the outbreak, the forecast for growth in 2020 has now been revised down to 0.5%. The current forecast assumes that the outbreak is contained across all major markets by the end of the second quarter, following which, conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year. However, there will be a lingering and potentially heavy impact on private investment owing to the financial toll that inflicted upon businesses and investors across a wide range of sectors. Growth in 2021 will be marginally higher than previously expected owing to the projected rebound (and high year-on-year growth rate) in the first half of next year. In the event that the spread of the virus continues into the second half of 2020, further downward revisions to the growth outlook are likely.

The global economy faces a severe economic downturn as the COVID-19 epidemic spreads around the world. Data from Johns Hopkins University shows that over 585,00 cases had been recorded worldwide and around 26,00 people had died as of March 27th. In early March, the IMF announced that it expected global economic growth to fall below the level recorded in 2019, of 2.9%. It had previously forecast that growth would accelerate in 2020 to 3.3%. Since then, the situation has worsened markedly, particularly in the US and EU, and the IMF has predicted that the global economy would go into a recession in 2020 with an expected recovery in 2021 contingent on countries’ containment measures and strengthened healthcare infrastructure.

With extreme quarantine measures including lockdowns of entire countries as well as international travel restrictions being imposed across many major economies, the supply shock is expected to dampen economic activity. The direct impact on construction has been the halting of work with labor unable to get to sites or because of disruption in the delivery of key materials and equipment. Reflecting these issues, the direct impact of the COVID-19 on construction has been extensive in the worst-hit countries, namely China, Italy, South Korea and Iran. Official data that would reveal the extent of this impact has yet to be published, but anecdotally it is evident that although projects may not necessarily have been formally classified as being on hold or cancelled, progress will have been severely affected.

More generally, the construction industry will be heavily affected by the expected widespread disruption to economic activity and a likely drop in investment, with planned projects being delayed or cancelled. GlobalData foresees particular struggles in the commercial and industrial sectors; businesses in these sectors are most at risk from the severe drop in economic activity, domestically and globally, and their immediate priorities will be on staying afloat and rebuilding their core operations, rather than expanding and investing in new premises or capacity. The residential sector also will struggle as economic activity weakens and unemployment rises, despite low interest rates and direct government support. There is a high risk that a considerable proportion of the early stage projects in these sectors will be cancelled or at least pushed back, with few new projects starting in the second quarter of 2020 as firms review their expansion plans.

Governments and public authorities will likely be aiming to advance spending on infrastructure projects as soon as normality returns so as to reinvigorate the industry. This will be spread across all areas of transport infrastructure and energy and utilities. With interest rates falling to record lows, borrowing costs will be at a minimum, but the success of government efforts to spend heavily on infrastructure will be dependent in part on their current financial standing. Moreover, with most governments prioritizing cash hand-outs, particularly to the economically weaker segment, their capability to invest in the infrastructure segment is likely to be constrained, especially in countries with high debts.

• Amid worsening economic conditions as a result of the COVID-19 outbreak, the construction industry is set for a year of contraction across Western Europe. The COVID-19 virus outbreak will bring severe disruption to the industry, as the strict quarantine measures imposed across the region will lead to ongoing projects being temporarily halted and new projects being delayed. The major markets including Germany, France, Italy and the UK are all set for negative growth in 2020, with a further downward revision likely if the situation worsens. As a result, GlobalData has revised its forecast for the Western Europe construction industry, with a contraction of 1.9% expected in the region. The outlook for the Eastern European construction industry is more positive than in Western Europe, as the region has thus far not suffered to the same extent as major markets such as Italy, France and Spain. While the impact has so far been limited, the health situation is expected to deteriorate in the coming months. GlobalData forecasts the Eastern Europe construction industry to grow by 1.4% in 2020, however, this is contingent on the virus being contained by mid-2020.

 

• Prior to the outbreak of the coronavirus (COVID-19), GlobalData was predicting a mild recovery in the pace of growth in construction in North America in 2020 thanks to a rebound in the housing market, on-going infrastructure investments and the recent trade truce between the US and China. But as COVID-19 continues to spread rapidly across the region and national authorities take drastic actions to contain the disease, developers, especially, homebuilders are expected to face a sharp slowdown in new construction projects as economic activity weakens and unemployment rises.

• Already with one of the world’s slowest economic growth and rocked by street protests and issues such as corruption scandals, high levels of crime and rising inequality, Latin America is now bracing for the prospects of going further backwards as the number of coronavirus cases rises quickly across the region. Due to its high-commodity export dependence and direct trade exposures to China, the US and the EU, the region’s economy and construction industry will be severely impacted by slower global demand, and significant commodity price declines. As a result, GlobalData has revised down its construction growth forecast for the region as a whole in 2020 to -0.3% from a previous growth forecast of 2.3% in the Q4 2019 update.

• GlobalData has sharply revised downwards its forecast for construction output growth across North-East Asia in 2020, to 1.4% from 4.2% previously, reflecting the fact that China’s industry has been severely affected, and other major markets in the region, notably South Korea and Japan, are also suffering a heavy impact. China is suffering an unprecedented decline in economic activity owing to the widespread and lengthy lockdowns since mid-January. Forecasts for economic growth in China are now being slashed; the China International Capital Corporation, for example, now predicts growth of 2.6%, down from 6.1% previously, while China Beige Book, data analytics firm, has revealed that its latest survey of more than 3,300 Chinese businesses points to a contraction in GDP of 10-11% in Q1 2020.

• The South and South-East Asia region is among the most vulnerable to virus outbreak from both the direct and indirect impacts. For South Asia, a WHO model predicts that the region could see a GDP reduction of 2% in case of a global influenza pandemic, while South-East Asia has a high dependence on trade with China and is heavily exposed to fluctuations in global trade. Governments across the region are trying to combat the economic strain brought as a result of the COVID-19 outbreak by announcing fiscal stimulus packages, particularly supporting the tourism and airlines industry, and adopting accommodative monetary policy with interest rate cuts. Prior to the onset of COVID-19 outbreak, GlobalData had expected the region to regain some of its growth momentum in 2020 to post an expansion of 6%; however, in view of the region’s close trading and economic ties with China, and the impact on key markets in the region, the forecast has been cut to 3.1%, with further downward revisions possible.

• Australia’s construction industry has been on a severe downturn, which in 2020 will be compounded by the outbreak of COVID-19 and the negative impact on the economy. GlobalData had been expecting only a marginal increase in construction output in 2020, rising by 0.6%, following a drop of 7.5% in 2019, but the forecast for 2020 has now been revised to a contraction of -2.3%, with growing concerns over the potential for a further rise in the number of construction firms going into administration. However, an expansion in infrastructure investment will provide support in the medium term. New Zealand’s construction industry will also succumb to the impact of tight measures implemented to contain the spread of the coronavirus.

• GlobalData has cut its construction output growth forecast for Middle East and North Africa (MENA) region for 2020 to 1.4%, down from the previous projection of 4.6% (Q4 2019 update) in light of the outbreak of the coronavirus (COVID-19) and the recent sharp drop in oil prices. Activity in the construction sector throughout the region is expected to slow down with the outbreak of Covid-19 as lockdown measures have been implemented across the region along with targeted support measures, such as monetary easing through interest rate cuts and fiscal stimulus measures to support the private sector and avoid a severe economic downturn. Saudi Arabia remains the largest construction market in the MENA region. Prior to the outbreak, Saudi Arabia’s construction sector had posted growth for the first time in five years, expanding 4.6% for 2019 in real terms. However, amid the worsening situation with regards to Covid-19 outbreak and the decline in oil prices, GlobalData has cut its forecast for construction output growth to 2.9% in 2020 and 3.2% in 2021.

• GlobalData has cut its construction output growth forecast for Sub-Saharan Africa (SSA) in 2020 to 3.6%, down from the previous projection of 6.0% (Q4 2019 update). The revision reflects the impact on the region’s economic activity and investment growth stemming from the wider global slowdown and the outbreak of COVID-19 in the region. COVID-19 outbreak presents a downside risk for short-term growth in the region, and its impact on the region’s economy is expected to be strong given the continent’s exposure to China, particularly in Ghana, Angola, South Africa, and Nigeria, which are reliant on China’s demand for their commodities exports. South Africa, will continue to struggle to generate growth drive as it falls into recession.

 

Construction and COVID-19 Survey of Construction Industry Executives

GlobalData recently surveyed industry executives globally to gauge the extent to which they have been subject to the impact of COVID-19. Notably, 68% agreed or strongly agreed that the COVID-19 outbreak had led to a halt in construction work, while 79% agreed or strongly agreed that it had led to delays in the commencement of new projects. With the initial round of the survey being concluded on March 24th, there had yet to be an overwhelming view that containment measures had greatly impacted the supply of materials and equipment. Nevertheless, globally 33% of respondents agreed that there had been issues relating to shortages of equipment, 42% with shortages of key materials, and 54% with shortages of labor.

The main challenge for the industry in the short term is that projects that are under construction are being delayed, resulting in a range of legal and financial ramifications for contractors. The risk of project cancellations is also high. The survey shows that 49% of respondents agreed or strongly agreed that COVID-19 had resulted in project cancellations, whereas 78% agreed or strongly agreed that contract awards were being delayed as a result of the outbreak and its impact on investor confidence and general operations.

In the event that the lockdowns are not prolonged beyond a few weeks, and that containment measures are effective in terms of controlling the spread of COVID-19, project owners, key contractors and other firms, should they still be in business, will aim to restart projects quickly and accelerate delivery where possible to avoid lengthy delays to completion. However, if the lockdowns are extensive, and companies do not get the support they need, at best there could be delays while new funding is secured or new contracts tendered and awarded, but at worst there is a high risk of companies failing and projects being cancelled outright or left partially completed.

Although at this point in the crisis period there is still considerable uncertainty as to how events will unfold and the extent to which the global economy will be affected, the general assumption among the industry executives is that the crisis will continue for up to nine months.

Saudi Arabia is cutting allocations for a number of its Vision 2030 initiatives and mega projects

Saudi Arabia is cutting allocations for a number of its Vision 2030 initiatives and mega projects Saudi Arabia is implementing a range of austerity measures following the announcement on May 11th that the Kingdom posted a US$9 billion budget deficit in the first quarter of 2020. The central bank’s foreign reserves fell in March to their lowest since 2011, while oil revenues in the first quarter fell 24% from a year earlier to US$34 billion, dragging total revenues down 22%.

Amid the worsening situation with regards to the COVID-19 outbreak and the decline in oil prices, the government decided to raise value added tax (VAT) from 5% to 15%, effective July 1st, and to suspend cost of living allowance paid to state workers starting from June 1st, according to Saudi Press Agency (SPA). According to the ministry of finance, the tax increase will not have much impact on revenue for 2020 because people are spending less under the curfew, but it will shore up the government purse for the coming years as the world recovers from the pandemic crisis. The Kingdom is rationalizing its
spending due to the unplanned fiscal and monetary policies to support the health sector and the overall economy and mitigate the economic effects of the pandemic and plunging oil prices. Earlier in May, authorities announced that they will reduce spending in non-priority areas of the 2020 budget by SAR50 billion (US$13.3 billion), accounting for 2% of GDP, to accommodate some of the initiatives announced in response to COVID-19 so that overall spending for 2020 remain close to what was planned. To further improve spending efficiency, a ministerial committee has been established to study the
financial benefits paid to all employees, contractors, and entities that include the Vision 2030 programs, and present its recommendations within 30 days.
Delayed capital spending The Saudi government’s revenues will suffer from the low oil prices and this will likely impact the government’s economic spending program and mega infrastructure projects in the pipeline. In the short- to medium-term, the government’s diversification drive will be severely disrupted. Saudi Arabia will cut some allocations for Vision 2030, with a total cost of SAR100 billion (US$26.6 billion). Delays in awarding contracts among other tough measures could push back the execution of high-ticket projects under Vision 2030. The construction of both the tourism hub on the Red Sea and the Neom entertainment city outside of Riyadh will have their timelines extended as announced by the finance ministry. Social
infrastructure and oil and gas projects now have the highest priority in terms of investments, but the pace of spending will slow.

Construction on major commercial work, especially in the hospitality sector, is likely to face delays or cancellations. Religious tourism suffered a setback when the Kingdom took the decision to close off the holy cities of Mecca and Medina to everyone, thus barring Umrah during the holy month of Ramadan and the high likelihood of cancelling the annual Hajj pilgrimage. Tourism generates very high revenues (almost 4 million tourists per year), due in particular to the Hajj. The Kingdom’s tourism ministry announced that it expects the tourism sector’s revenues to decline by 35%-45% this year, compared to 2019, due to the containment measures taken by the government to fight the pandemic. Reflecting these developments, major religious-tourism expansionary projects are at most risk, notably the third phase of the Grand Mosque in Mecca has been paused. The entertainment sector will also have a set back as social distancing gets prolonged. One of the main goals of the country’s Vision 2030 is to increase Saudi household spending on domestic entertainment from 2.9 to 6% of total expenditure. There are 140 cinemas planned to open in 30 malls across the Kingdom, with the contagion going on, construction will be slow in this sector. Saudi Arabia plans to diversify its oil-dependent economy through tourism, with the sector expected to contribute to 10% of gross domestic product by 2030. GlobalData has cut its forecast for construction output growth for the Kingdom to -0.6% in 2020 (with a possibility of further cuts if lockdown is extended longer and the fiscal situation worsens). Prior to the outbreak, Saudi Arabia’s construction sector had posted growth for the first time in five years, expanding by 4.6% in 2019 in real terms; an outturn that was better than had been expected. A key pillar of its Vision 2030 program is increasing non-oil economic growth, which accelerated at the fastest pace in four years in the second quarter of 2019.

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Source: 

GlobalData Plc | Registered Office: John Carpenter House, John Carpenter Street, London, EC4Y 0AN, UK Registered in England No. 03925319

The new coronavirus outbreak has hit the economy hard. With businesses closing, city curfews, manufacturing shutdowns, there has been a detrimental effect on the global economy.  Here’s a summary of the report issued by Global Data on April 8^th 2020.

Prior to the outbreak, UAE’s construction sector had posted growth of 3.3% in real terms in 2019 and was expected to grow by 4.3% in 2020, given various government initiatives such as the Energy Strategy 2050, the Sheikh Zayed Housing Programme and the Dubai Tourism Strategy. However, amid the worsening situation with regards to the COVID-19 outbreak and the decline in oil prices, GlobalData has cut its forecast for construction output growth to 0.5% in 2020 and 4.1% in 2021. This central forecast is based on a positive scenario that the outbreak will mostly be contained in the second quarter of 2020, such that restrictions on travel will be eased thereafter.  Infrastructure projects are a key part of the UAE’s economic expansion, but there are risks to investment growth owing to weakness in the oil sector, which poses a downside risk to the forecast. Sheikh Mohammed bin Rashed Al Maktoum, Vice President, Prime Minister and Ruler of Dubai is intent on going ahead with the implementation of all planned national projects and value-added initiatives.

People who work on construction projects in Dubai are exempted from the 24-hour Sterilisation Programme but are subject to obtaining a permit from Dubai Municipality and the Permanent Committee for Labour Affairs.  However, Dubai-based Emaar, the biggest developer in the Emirate, has suspended construction work on various projects and introduced a new salary structure amid the economic disruption caused by the novel virus and lockdown policies in place. Work has been suspended on projects in Downtown Dubai, Dubai South and Dubai Creek Harbour. The government’s economic and fiscal policies will continue to be partly guided by global oil price movements, as the emirate of Abu Dhabi, which funds a major share of federal spending, is still heavily reliant on oil revenue.

ADNOC, the state run oil company of Abu Dhabi, has notified contractors and suppliers that it will review existing deals to find ways to cut costs due to the steep slide in oil prices. ADNOC announced it would raise its oil supply to a record 4 million bpd in April, about 1 million bpd more than current output as it speeds up production capacity expansion projects. Italian E&P oil major ENI, one of ADNOC ‘s main partners in major upcoming projects, has recently declared plans to review all ongoing projects in the Middle East. It has announced to reduce 2020 and 2021 capital expenditure by US$2.2 billion and about US$3 billion, equivalent to 25% and 30% of its initially planned amount, respectively.

Construction in the energy and utility sector will feel the brunt of plunging oil prices. Abu Dhabi’s energy department postponed the announcement of winning bids for a solar power plant and is monitoring energy prices and supply chains. A plan by the Abu Dhabi National Oil Company (ADNOC) to launch a new benchmark for its flagship Murban crude oil grade may be delayed beyond June as it awaits regulatory approvals amid current uncertain market conditions, this constitutes a hit for the energy market in Abu Dhabi.

Investment activity is likely to slow in the UAE as investors react to uncertainty, with the retail and hospitality sectors being the most affected. The commercial sector in Dubai, the region’s most diversified economy, has been hit hard by the disruption to global travel, with tourism expected to lose 5%-6% of GDP this year if virus containment measures were to last for another three to four months. Expo 2020, which Dubai is to host, is also in doubt after the event’s organizers backed a proposal to postpone it for a year due to the pandemic. However, postponing the event for 2021 could be positive as many construction companies would then have more time to complete their projects and the pandemic should have passed with the world being ready to emerge from extended periods of lockdown and social distancing. It would also give the Emirate ample time to repurpose the event, to coincide with the 50th anniversary of UAE as a nation, with leaders planning to deliver a road map for the next 50 years in all sectors from infrastructure and economy to health and education.

Abu Dhabi’s hospitality sector, which has been a hub for hosting various types of events in 2019, attracting tourists and boosting the sector in the city, will also face the brunt of the contagion. The demand for hospitality sector in Abu Dhabi is expected to severely be impacted as new upcoming events, such as the F1 Grand Prix, and festivals scheduled for the year 2020 will be cancelled, which will affect the commercial sector in the city and potential derail future investment plans.

The residential sector in the UAE will be hit hard as a result of the outbreak. The sector has been facing headwinds in recent years, which GlobalData expects to intensify 2020, affecting investment flows into real estate from the wider region. The effects of this will be felt heavily in Dubai. Prior to the outbreak, the Dubai government had taken steps to limit future supply, with the formation of a new Real Estate Planning Committee in Q3 2019 to study the real estate market, evaluate all future projects and control the pace of projects. Developers are launching fewer new projects, which will be further re-assessed in light of the outbreak and focusing on the sale of existing inventories.

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Source: https://construction.globaldata.com/Analysis/details/covid-19-sector-impact-construction—uae

The new coronavirus outbreak has hit the economy hard. With businesses closing, city curfews, manufacturing shutdowns, there has been a detrimental effect on the global economy.

With social distancing and stricter stay at home policies being rolled out to contain the spread of COVID 19, the construction industry, across the globe, has been indirectly affected amidst this pandemic. Where some private construction sectors have implemented remote working which will result in impacting essential administrative procedures for site work to progress, others continue functioning ‘as usual’ in the UAE.

Amid the worldwide spread of the coronavirus (COVID-19) and the drastic measures taken by authorities to restrict travel and economic activity, confidence levels among construction industry executives have plummeted, according to GlobalData’s latest confidence survey. The Construction Confidence Index (CCI) in Q1 2020 fell to 34.6 points, down from 56.9 in Q4 2019. This marks the seventh consecutive decline in the CCI score, and is the lowest level recorded over the past four years. Confidence levels were already steadily declining, having dropped steadily over seven successive quarters, but this is the first time since the survey started (in 2014) that the CCI score has actually dropped below the 50-point mark, which implies that industry executives are pessimistic about the opportunities for growth in the coming six months. Also for the first time, confidence levels with regards to prospects of growth at the company level have dropped below the that recorded for prospects at the industry level, reversing the previous trend of respondents’ perception bias possibly overstating the company’s relative competitiveness.

Given the severe disruption in China and other leading economies worldwide following the COVID-19 outbreak, GlobalData’s forecast for construction output growth in 2020 has been revised down to 0.5%, compared to the previous forecast of 3.1% growth (in the Q4 2019 update).
This is provided that current forecast is based on a relatively positive central scenario that the outbreak is contained across all major markets by the end of the second quarter, further cuts to the growth forecast are likely.

The impact on the industry in the short term will be reflected in the halting of projects in execution, in terms of shutdowns and lack of materials and other issues relating to supply chain disruptions, as well as severe delays in progress on projects at pre-construction stages, given likely delays in processing of building permits, tendering and contract awards.
GlobalData recently surveyed construction industry executives globally to gauge the extent to which they have been subject to the impact of COVID-19. Notably, 68% agreed or strongly agreed that the COVID-19 outbreak had led to a halt in construction work, while 79% agreed or strongly agreed that it had led to delays in the commencement of new projects. The risk of project cancellations is also high. The survey shows that 49% of respondents agreed or strongly agreed that COVID-19 had resulted in project cancellations.

The UAE Scheme

Global economic activity has slowed sharply following the rapid spread of the virus. The pandemic has caused business closures, city curfews, travel bans, financial market upheavals and manufacturing shutdowns in major global economic hubs. To aid industries, the Central Bank has introduced an AED100 billion Targeted Economic Scheme. This scheme aims to “to contain the repercussions of the pandemic COVID-19”. Out of the AED100 billion, 50 billion DHS will be set aside for all UAE banks at zero-cost so that they can boost their lending capacity.

This package is intended to support banks and businesses during the Coronavirus crisis for up to six months. Experts in the field say this package will be beneficial for the local construction sector, which includes small and medium-sized design and contracting enterprises.  The UAE government has managed to suspend social activities without a severe effect on economic output. In the construction sector, remote working, which some private sector employers in the UAE have voluntarily offered, could impact administrative procedures that are essential for site works to progress, such as sign-offs and schedule management.  Meanwhile, even though cargo travel currently faces fewer restrictions than passenger flights, supply chain disruptions are likely to deepen in the weeks ahead. China – the world’s largest exporter and the epicentre of COVID-19 – has only just begun a slow recovery after its factories were shut down for almost two months to curb the spread of the virus.

What about Expo2020 starting this October? The Expo 2020 Dubai has addressed in an official statement – concerns about its plans and preparations – amid the novel coronavirus outbreak. Expo 2020 Dubai Steering Committee stated that it is exploring the possibility of pushing the big show by one year: “While everyone involved in Expo 2020 Dubai remains firmly committed, many countries have been significantly impacted by COVID-19 and they have expressed a need to postpone Expo’s opening by one year, to enable them to overcome this challenge”, adding that it closely monitoring ongoing developments and taking all sensible precautions to manage and mitigate the risk to all those involved while adhering to the guidelines issued by the Dubai Health Authority, Ministry of Health and Prevention (MoHAP), and World Health Organisation, with due diligence.

Workers Safety is nothing new

All construction sites have undertaken the necessary precautionary measures such as maintaining hygiene and adding hand sanitiser stations throughout the sites, some sites are even checking people’s temperatures before entering as well as maintaining proper PPE. Since most workers are working outside, this should be the safest means of work. However, caution needs to be taken in camps, bus and rest areas.

Churning out Solutions 

Despite the levels of uncertainty, steps are being taken by all contractors and businesses to be as prepared as possible for the future effects of the crisis.  Construction sectors are working closely with stakeholders to identify the greatest risks and coordinate their efforts to prevent the impacts that may arise. Much stricter hygiene and sanitisation regulations are being implemented by all firms to keep their workers safe on site. Some firms are testing smaller groups of workers present on the sites at a time.

Solutions such as asking workers to maintain a set amount of distance amongst themselves, cleaning out job-site trailers on a regular basis daily, and hiring commercial cleaners to clean and disinfect areas of the project can prove highly beneficial when it comes to flattening the curve while still going forth with regular construction activities.

Online communication applications such as Microsoft Teams and Zoom are an added perk since firms do not have to put a complete halt to their meetings with clients, subcontractors, and other business partners.

It is anticipated that the timeline will  be at least 10 months away, meaning that hygienic and exposure-control measures will continue to be the first line of defense for most governments.  In many countries around the world, hospitals or care facilities are emerging over night as the number of infected cases increased.

The Chinese Scheme

China has resumed construction on just under 90% of ‘key projects’ according to an official with the National Development and Reform Commission (NDRC). Construction of 89.1% of 11,000 key projects is ongoing – although this figure does not include the Hubei Province which suffered large numbers of people being infected with Coronavirus. About 60% of workers have gone back to the construction sites, but that does not mean they’re all working. Because of the logistical problems facing the industry, construction materials cannot be delivered to sites. Less than 50% of tower cranes are operating because not enough skilled workers have come back to work. In Shanghai, for example, less than 80% of projects have started back up for local contractor Shanghai Construction Group. For other contractors, it’s less than 50%. Dealers have been struggling with a lack of cash flow for the last two months. But to cope with the return of the market, in particular the excavator sector, in March a number of excavator dealers have been recruiting additional staff. With the encouraging policies for construction activity, the dealers are more confident and in a better position than businesses in other industries.

The European Scheme

Almost one third of CECE (Committee for European Construction Equipment) members included in a survey are being “significantly affected” by the COVID-19 pandemic with 30% already closing factories, a new survey published by the CECE on March 23 and 27. The CECE represents the interests of national construction equipment manufacturer associations in 13 European countries including some 1,200 companies that employ approximately 300,000 people directly and indirectly. The flash Barometer survey carried out between 23^rd and 27^th March shows clear concerns amongst CECE member companies with 32% of respondents being significantly affected by the crisis and 30% already closing factories. The report states that “the COVID-19 pandemic challenges the customer-related issues, namely shutdown of construction sites and cancellation of projects. With 40% of respondents foreseeing between 10% and 30% decrease in sales one thing is certain: the COVID-19 crisis is affecting and will affect the construction equipment sector.

Manitowoc has suspended production in some of its factory namely in Europe and China and notified partners that: ”[they] may experience disruption to the supply chain which could impact our performance to you.  We will continue to work to ensure there are no disruption to our operations, but as you will appreciate we can’t guarantee this, so please be prepared for possible delays to deliveries.”.

Terex on the other hand had issued a statement regarding COVID-19 on March 18, stating that “production is still occuring but steps have been taken to ensure the safety of its team members, customers and communities. At Terex, our top priority is safety. As a global organization, we have manufacturing and support sites in many parts of the world, including some greatly impacted by coronavirus COVID-19 – China, Italy and locations in Washington State (U.S.)”

Nonetheless, the CECE survey adeed that, “as there was a solid demand for construction machinery before the crisis and many projects were shut down but not cancelled, CECE is optimistic about the possibility for the industry to recover as soon as the virus is defeated.”

The UK Scheme

The UK’s Civil Engineering Contractors Association (CECA) said today it had received government advice that construction in England can continue if it can be done safely and in accordance with Public Health England (PHE) guidance. The UK’s Construction Leadership Council (CLC) and three of the main building and construction bodies in the UK have urged that construction sites remain operational during the COVID-19 crisis. In a letter to the prime minister Boris Johnson, the Council said keeping construction working would avoid many thousands of job losses and prevent the closure of thousands of businesses and delays and cost increases on important projects: ““If construction activity comes to halt, given the scale of employment provided by our sector, there would be an immediate need for the Government to provide emergency financing to keep the construction industry operational and prevent irreversible damage to the economic security of millions of people.”

The US Scheme

The Associated General Contractors of America (AGC) has been urging the Department of Homeland Security (DHS) to declare construction an essential industry. With this declaration, construction projects can continue to support critical infrastructure and economic activities, in a way that protects workers and the general public from the spread of coronavirus.  Meanwhile, the AGC launched a survey on March 27th which reported that 39% of contractors had been affected by project owners holding or cancelling current construction projects amid deteriorating economic conditions.  In addition, 45% of the 1,640 respondents reported experiencing project delays or disruptions. Shortages of material, parts and equipment, including vital personal protective equipment for workers such as respirators, were reported by 23% of respondents, while 16% said projects were delayed by shortages of government workers needed for inspections, permits and other actions. A total of 13% said delay or disruption had occurred because a potentially infected person had visited a jobsite. Association officials warned these cancellations mean massive job losses are likely soon unless Congress passes targeted recovery measures to boost infrastructure funding, compensate firms for lost or delayed federally funded work and provide needed pension relief. An example of government support is the decision to expand unemployment benefits as nearly 10 million Americans have lost their jobs because of the coronavirus, and this number is expected to grow as the pandemic expands in the US.

The new coronavirus is said to be a health and an economic virus. It is a time for unity, cooperation, and solidarity. Being an evolving situation, the industry has to ensure that they are up to date on decisions by public officials in the regions where construction projects are still ongoing. As construction work continues to go on amidst the fear and panic, workers and businesses will need to be flexible in their approach. The Covid-19 pandemic will force businesses,governments and communities to adjust their existing processes, and will forever change the current construction landscape.

End.

Sources:

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https://www.khl.com/international-construction/us-coronavirus-relief-package-now-covers-self-employed-contractors/143269.article?utm_source=newsletter&utm_medium=email&utm_campaign=Construction+and+Coronavirus+-+3rd+April+2020&utm_term=C%26C