The economic growth of a nation broadly depends on the excellence of infrastructure which largely revolves around its roads, dams, flyovers, bridges and of course, the skyscrapers and other commercial as well as residential buildings. The construction industry here plays the pivotal role in making or breaking that economy’s substructure largely contributing to maintain that trade link within the national boundaries as well as outside it. Past few months, since the outbreak of corona virus, when no industry vertical has remained untouched from the havoc it created; construction sector too is bound to face the upshots of the pandemic.
Talking about the determinants of the construction sector all over the globe, following prominent ones definitely set a strong basis of growth-
- Mounting investments in the area
- Constant growth in the emerging economies
- Rapid industrialization
- Supportive government schemes either via smart city projects or through national schemes such as Five Year Plans of distinct economies
- Investment in transport, and housing projects
Apart from these, rising global population coupled with urbanization are the noticeable elements of the construction industry’s growth. As per the United Nations, the global population in 2019 was more than 7.7 billion which is expected to increase to 8.18 billion in 2025. Moreover, around 54% of the population lived in urban areas in 2014, which was estimated to be around 3.86 billion. It is further expected to reach 66% by 2050 which will be more than 6 billion people. The largest urban growth will take place in India, China, and Nigeria. Managing urban areas is challenging for the government in emerging economies that includes forming and implementing cohesive policies and plans related to the development under smart cities projects. These estimated scenarios were to create a significant demand for residential infrastructure globally. However, the outbreak of COVID-19 has terribly swept away the current growth perspectives. The global operations have come to a pause making it hard to show the recovery anytime soon!
European geography is found to be most affected due to the pandemic:
Europe is among the most affected region all across the globe. As a result, majority of the regional economies have strictly started following the nationwide shutdown. For an instance, Spain introduced lockdown on 14th of March 2020. It was further announced on 29th of March that all ‘non-essential workers’ were to stay home for the next 14 days. Here, it is worth mentioning that the workforce of construction sector is apparently a subpart of the non-essential workers community.
Though the lockdown was exempted on 13th of April 2020 for some non-essential sectors including construction, the workers were supposed to adhere to the strict guidelines to maintain the safe working environments. Correspondingly, after the seven weeks lockdown, construction projects were given the relief to resume their respective operations from 27th April 2020 in Italy.
Similar relaxation was also witnessed in the US, when on 24th of April, the government of Washington allowed the opening of construction on a limited basis. This relaxation was also reflected in Pennsylvania on 27th of April. It was announced that the construction sector was allowed with most of the other services from 1st May 2020.
Due to COVID-19 pandemic all across the globe, several companies have halted the construction activity worldwide, especially when this is the peak season for the industrial operation. In a couple of months, the global construction industry will start to work with around 80-90% efficiency. But it is foreseen to get severely affected due to the low demand side in the upcoming months to even a couple of years due to the COVID-19 pandemic.
