What can a Construction Industry expect post COVID-19 Lockdown?
Updated: May 11
The lockdowns enforced to contain the spread of SARS-CoV-2 certainly helped to contain the disease to an extent, but it had caused severe effects in countries’ economies worldwide and India is no different. The country went on to total lockdown on 25th March which was later extended to 3rd May to further contain the speed of spreading of COVID-19. In most parts, the enforced lockdown has shown its positive results too, but with its benefits, it has and will present a number of challenges towards various sectors and economy. One among them is the construction sector which had already been facing difficult times as its growth was only accounted by a change in growth percentage of 4.7% in 2019-20 as compared to 12.2% for 2018-19 .
As per the Press note on Second advance estimates of National income 2019-20 and Quarterly estimates of Gross domestic product for the third quarter (Q3) of 2019-20 published by MoSPI, which presented a downward rate of growth in 2019-20 as compared to 2018-19 (see Table).
Table: Percentage change of GVA at basic Prices in Construction Industry
A slow rate of growth would further reduce due to the lockdown as the construction companies gain a major portion of their annual revenue during January- March Quarters.
Although, with an aim to start the economy allowed some relaxations in the non-hotspots zones in relation to construction works but with a strict ban of travel of labourers, where work is done within the limits of Municipal Corporation, in rural areas outside the limits of municipal corporations, but these works will also face problems related to unavailability of the labour force due to their migration back home.
Future after Lockdown
The construction industry would face a major challenge of availability of labour force immediately even when the lockdown is lifted and secondly, a shortage in the availability of raw materials as most of the industrial units have been idle during this time. The financial misery would also become pertinent because of the dainty economic condition set in due to this pandemic. The government though time and again during this lockdown has come out with a number of relief measures and financial package, but the effect this disease has caused worldwide cannot be easily erased and it has caused a major dent in growth prospects of construction industry and the entire country at large.
Sulakshya Gaur, is a Ph.D. Scholar in Department of Civil Engineering at Visvesvaraya National Institute of technology, Nagpur.
1. Press note on Second Advance Estimates of National Income 2019-20 and Quarterly Estimates of Gross Domestic Product for the Third Quarter (Q3) of 2019-20 published by National Statistical Office Ministry OF Statistics & Programme Implementation, Government of India
2. COVID-19 impact: Near-term cash flow stress expected in construction sector, says Icra Published on https://economictimes.indiatimes.com on 31st March, 2020.
3. COVID-19: Construction disruption across India in Q4 may hurt companies Published on https://economictimes.indiatimes.com on 27th March, 2020.
4. Coronavirus: Full list of services allowed in non-hotspot areas from April 20 Published on https://www.indiatoday.in/ on 19th April, 2020.