BEYOND COVID-19: CHALLENGES AND OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY
It is unarguably agreed that socio-economic rippling effect inflicted by the COVID-19 upon the world is unlike any the modern world has seen in decades. While the gloomy bearish outcomes may prevail for a foreseeable future, it is vital identifying the challenges and opportunities for clients and the industry at large, in order to survive and thrive in these difficult times.
While most of the industries are weathered down by the impediments ensued due to the COVID-19 pandemic, construction industry too has sustained difficulties due to its one-off nature. The industry, being heavily relied upon labour and raw materials, has been hampered down by the COVID-19 pandemic and has sowed the seed of doubt amongst the investors regarding their commitments to future projects. Many projects have been delayed and cash inflow complications have contributed to supply chain deficiencies. The industry has met with challenges, which may require smarter solutions rapidly implemented.
However, an insightful analysis may suggest COVID-19 has presented certain opportunities to the construction industry as well. The clients and industry at large need to heed the potential opportunities and act wisely on them to secure their business interests and achieve the expected future growth.
Opportunities for Clients and Industry at Large
1. Portfolio Expansion
While sectors such as hospitality and retail sections are suffering setbacks, several other property sectors are booming. Experts are noticing a behavioural pattern, with the consumers are biased towards online purchasing. Therefore, with the expected growth for e-commerce sector, demand for high quality data driven/online service providing facilities such as warehouses, data centres and logistic facilities are expected to increase, presenting the clients with opportunities to expand their portfolios. In another example, the diminished traffic movement can act as a stimulus for early completion of infrastructure/transport sector projects providing commercial benefits for clients while reducing costs.
2. Construction Process Improvements
Clients can improve the efficiency of their construction processes by transitioning to efficient digital solutions, enhancing better resource management and collaboration across teams. Digital, social media and communication platforms can be used to drive projects forward. The transitioning shall prove to be rather convenient with the reduced workloads during COVID-19 pandemic. The industry can benefit in the long term with the implementation of new technologies such as Artificial Intelligence (AI) and the current situation can provide a perfect incubator for the transitions.
3. Competitive Prices for Construction Projects
Clients can benefit from the stagnant construction industry and expect competitive prices for new construction projects due to increased competitiveness among construction organizations. Therefore this can be an apt opportunity to initiate the pre-contract phase of the projects, which will then be ready for construction, post COVID-19, as soon as the restrictions are eased out.
4. Contract Renegotiations
Even within the limits of the contractual provisions, especially for new projects, clients can start renegotiating their contracts including prices to gain some advantage against current market conditions and setbacks presented. Clients can work in collaboration with the contractors and the consultants to achieve a reasonable outcome for all parties.
The alliance amongst all the parties shall be imperative in the times ahead for improving the resilience of the construction industry. The collective efforts and cross functional approach in problem solving can go a long way and may prove very effective. At Excom we are determined to seek solutions that will propel business and project continuity for our clients while keeping construction projects productive during and post COVID-19 times.
BSc QS (Hons), MAIQS