The Coronavirus has adversely affected the global economy by halting and delaying operations in different sectors, including the construction industry. The pandemic has also disrupted projects commencement and completion dates due to the effects of lockdown and slowing production levels. Most construction firms have also scaled down due to shrinking demand and squeezed cash flow as the purchasing power reduces globally. Here are various ways in which the COVID-19 has affected home constructions.
Potential Labor Shortage
To help prevent the spread of the virus, most institutions have closed down, and companies are now turning to telework to keep the businesses afloat. However, for the home construction sector, this may not apply since they require physical presence at the work sites. Yet, if a person gets sick during work, then the builder company has to stop construction and even send some workers on leave which may cause some severe delays.
Material Delays and Shortage
Builders are also facing different levels of supply chain disruptions, and they may not have the necessary materials required to complete home constructions on time. The builders may have to postpone some work or look for some domestic alternatives. Moreover, most industries globally now prioritize on producing essential items, and some of the construction materials may not be considered necessary, thereby delaying construction. It could also lead to potentially a rise in the cost of materials.
The pandemic has disrupted nearly all aspects of life, including financing. Lenders are now tightening their standards. Finances can dry up, and most builders may postpone new home building projects until the uncertainties pass. Most lenders are now focusing on risk mitigation and conservative projects. Based on the financial institutions involved, the builders may require presenting a higher credit score or massive down payment.
Troubled Travel and Move –INS
Clients are also facing challenges to move into finished houses outside various states, and they then opt to postpone projects. Some countries have also introduced bans on international work travel to help contain the situation. Other construction companies are still trying to figure out how to deal with outbreaks near their job sites and have chosen to shut down their firms due to quarantine and travel bans restrictions. As most countries opt to cautiously lockdown to curb the spread of the pandemic, some homebuilders are now embracing the online lead generation alternative to keep interests high.
Health and Safety Concerns
The safety and health measures put in place by the government will potentially slow down new homes constructions. Firstly, the builder has to ensure that all the workers onsite dress in the appropriate protective gear. Also, there has to be a hand washing section on site with enough soap and sanitizers and isolation options for workers who might have been exposed to the virus. The preventive measures cause some undesirable delays as workers take more time to wash and sanitize. In contrast, others take mandatory leaves to minimize the number of people in a specific site at a particular time. Besides, some workers are now recording some signs of mental health concerns due to anxiety brought about by the virus, which potentially reduces productivity.
Although some home builders may access local materials, government orders in some states may not allow them to work. In some regions, the construction operations are in a temporary halt due to closure orders for non-essential businesses. A pause in construction may lead to temporary layoffs of employees. Even in areas where development is still happening, the builders aren’t able to work efficiently due to the economic slowdowns, reduced working hours, and shut down of specific sites.
With the continued uncertainties, the builders may still appear contractually responsible for delays in home constructions. With the current global unpredictability, construction firms are now choosy on various contractual terms and significant provisions. Most companies are only picking projects that allow work suspension and termination in certain circumstances. It will, therefore, limit the number of jobs available.
This unprecedented situation has profoundly impacted the construction industry due to various orders governing closure, travel restrictions, and social distancing requirements. The above guideline gives a detailed overview of the multiple impacts of the pandemic in new home constructions.