Issues affecting the construction industry due to Covid-19 | Sunday Observer

Issues affecting the construction industry due to Covid-19

12 April, 2020

The construction industry is a sector that will be severely affected by the COVID-19 pandemic. Unless positive intervention is made by the stakeholders, millions of construction workers will face dire consequences in the immediate future. In an interview with the Sunday Observer, the President Elect of the Chamber of Construction Industry (CCI) Architect Jayantha Perera, an industry veteran of over 40 years of experience, and past President of Sri Lanka Institute of Architects (SLIA), past Chairman of South Asian Architects, member of the Advisory Council to CIDA and currently the Chair of Practice of Commonwealth Association of Architects, presented main solutions to the issues and proposals to develop the industry


Q. What is the contribution of the construction industry to the GDP and employment generation in Sri Lanka and what will be the impact of the coronavirus pandemic?

A. The economy of any country runs on two major arms, the Manufacturing Industry and the Service Industry. With a ‘complete lockdown’ in the country due to coronavirus, 90% of the Manufacturing Industry has shut down and the supply chain severely affected. This means one arm of the country’s economy is disabled. This would ultimately transform in to huge losses once the lockdown is removed. Construction is part of this process and somewhere along the chain we as construction industry stakeholders will also be facing the brunt of it.

The spread of the virus and getting it under control is only part of the issue: the aftermath of the epidemic is highly unpredictable and the current forecast of a world-wide recession will certainly impact on the construction industry adversely, especially in Sri Lanka, where the industry has not recovered from the Easter Sunday tragedy of 2019. When other sectors such as foreign employment, apparel industry and tourism will take precedence, construction contractors and consultants will be adversely affected.

The contribution by the Construction industry to the GDP and Employment generation is about 8%. Gross Domestic Capital Formation contribution is about 42%.

The construction industry employs over 1 million people of which a majority are labourers and semi-skilled workers. Mostly, they belong to the lower echelon in society and are the sole wage earners of the family.

Q. As an industry specialist, what is your suggestion to overcome the short term issues?

A. Due to the Easter tragedy in April 2019, the industry was adversely affected In the short term Cash flow issues resulting timely payments issues to employees. Owing to nonpayment to contractors and consultants for ongoing projects, they are already facing financial difficulties. As a result of the coronavirus, all construction sites had to be closed. To ensure wages to employees for the months of April/May/June the companies require a stimulus package as a short term measure. Therefore, my suggestions are as follows:

a) Items such as computer servers, electronic items, manufacturing tools, testing equipment, documents idle in offices, sites and workshops and would be damaged or destroyed due to non-maintenance. Also, there can be damages to important data due to overheating, rats and termite attacks preventing resumption of businesses. Therefore, I suggest allowing, with some control, at least a technician and the owner to be present to minimize losses.

b) Working from home is not possible unless computer facilities, software, essential hard copies, soft files etc. are provided to the employees. Arrangements have to be made by the authorities in this regard. However, physical working at sites is still not possible at this point in time.

c) Provide financial assistance to sustain employees without terminating them.

Q. What are the medium term solutions to uplift the industry once the issue of the virus is cleared?

A. Restarting projects which were in the pipeline including those supposed to be stopped or postponed. Also offer some benefits to investors to invest in the industry to uplift the industry.

It is important to accelerate the approval process to avoid frustration of the investors. In the medium term local industries (E.g. the brass industry which existed in Kiribathgoda and Pilimathalawa) should be revived. Light fittings productions by local SMEs should also be restored.

Mechanism to promote and protect SMEs involved in construction with guaranteed payment system with standard agreement should be developed for industries such as steel fabrication, carpentry / joinery, furniture, artifacts, personal protection / safety equipment and so forth.

Q. What are the opinions and future trends predicted by industry experts in the global arena?

A. It is the view that the construction industry will be facing harder times throughout the world. These countries will individually concentrate more on nationalism to protect their own interests. They will seek self-sufficiency in selected sectors through slowing down non-essential segments. As per their opinion, most will look for environment friendly indigenous based construction industry. In my opinion this phenomenon will probably end globalization as we know it.

Q. What do you suggest as the long term remedies for the industry sustainability?

a. Carry out comprehensive research studies on the construction industry to take rational decisions based on accurate information.

b. Conversion of the industry to a more factory / off site based assembling industry.

c. Digitalization of the processes including adopting Building Information Modeling (BIM).

d. The epidemic and the predictions of environmental changes are bound to reset the status quo. Therefore, the industry may need to be more flexible and ready to effect structural changes: in effect, shed the shackles of a system that is destined to change may be even beyond recognition. We need to commence a dialogue and identify weaknesses and recommend adjustments and/or re-orientation.

e. Even without the coronavirus epidemic having to force us to re-think, there were construction specialists who were critical of our industry in the last few decades of not specifying local building materials but opting for imported varieties. Consultants, have not been contributing to the development of local industries and creation of local employments and thereby have been playing a marginal role in that arena. In the long term, consultants need to play a more significant role in the development and refining of local building materials.

Q. What are the possible actions to be implemented while COVID 19 is in existence?

a) Prepare guidelines for working at sites, offices and workshops during post COVID 19 period. Some countries have already prepared this.

b) Draft a master plan, new economic strategy and design facilities for industries that are to be prioritized such as agriculture, education, IT and telecommunication infrastructure in managing the time.

c) Call a report from professional institutions on sustainable construction to make meaningful development considering future possibilities and economic strategies.