The Global as well as the Indian economy has taken a big hit due to the impact of Covid-19 since all the economy leading industries has paused their operations or reduced their productions.
Construction industry, a leading contributor to the Indian economy (8.2% GDP) has been severely affected by this pandemic.
Cement and steel being the two core sectors of the economy, have also put their operations on halt due to the lockdown, thus leading to supply chain disruptions.
Shortage of labors:
The construction industry alone employs 12% of the nation’s population and requires a larger workforce with both skilled and unskilled laborers.
And more than 30% of the labors have migrated back to their natives due to the fear of pandemic.
All construction activities including private as well as public works have been bought to a halt after the Government imposed the lockdown, affecting the livelihood of daily wage workers.
Impact on large scale projects:
No supply of materials and shortage of workers has highly affected the private builders & developers, thus leading to the delay of project completion and conversely affecting the timely delivery of the project to the customers.
The public infrastructure projects which acted as economical boosters have also been paused by the government.
The construction industry & businesses related to this sector have a high cash transaction ratio when compared with any other industry/ sector. This factor will slow down the overall payment process within the industry.
Any construction work undertaken now will be slow processed and can push up the procurement costs.
Future of construction industry:
With the Government planning to exit the lockdown strategically, the construction industry will be revived slowly. However, the presence of Covid-19 will continue to haunt the sector.
We might see some new policies by the government regarding the safety of the workers, new guidelines for minimal labor requirements, on-site facilities for them, and the use of technology for detection & further prevention of the disease.
The government can also relax the interest terms provided to the individual homeowners. The builders/ developers might seek some financial relaxations (penalties) and extensions to address the delay of their projects.
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