Today’s guest post looks at how we can define the “new normal” for the building and renovation industry in COVID times. By Sina Sadeghpour.
The upsurge of the COVID-19 pandemic has had a huge impact on the building and renovation industry. While some contractors, owners, interior designers, and supply chain vendors are enduring a low-level impact, many others are finding themselves completely overwhelmed by the situation.
Construction and renovation activities are either facing a slowdown or have come to a complete halt due to the unavailability of goods or manpower resources. All these complications impel us to analyse, rethink, and find solutions for both, the short-term, as well as, the long-term ramifications of COVID-19 on our businesses.
4 Ways in Which the Pandemic is Affecting Construction Businesses
- Disruptions in the Supply Chain – In the last 10 years or so, Australian builders and construction companies started importing raw materials heavily from overseas destinations, especially China. Almost 60 percent of the raw materials which are used in the construction businesses in Australia are imported from China. But due to the pandemic situation, manufacturing units in China are shut down, which has significantly reduced the volume of exports they were earlier supplying. Shortage of materials like aluminium, tiling, electrical parts, carpets, lifts, and glazing is being recorded everywhere.
- Restriction of the Movement – Since domestic as well as international movement of raw materials is now quite restricted, getting supplies or manpower from other destinations is either a considerably slow process or is not an option altogether. This shortage in supply has led to the depletion of local resources pretty quickly which has become the cause for either substantially higher costs, or degraded quality, or both.
- Higher Costs of Materials – Costs of raw materials and services has gone up tremendously not only because there’s a lack of supply, but also, because of the weaker Australian dollar. Importing goods on time has become really difficult so sourcing them from local vendors is the only option. But due to this increased pressure on the local vendors, the costs have gone up and yet there are long delays.
- Operational Difficulties Due to Social Distancing – As much as a 60 percent decrease in productivity has been reported in construction works throughout Australia because of social distancing norms. Since you have to maintain strict social distancing, you can convene only a small number of trades on the site at any given point of time. This has become one of the most stressful issues for the contractors – how to operate with such limited manpower? Some people are experimenting with split-shifting, while some are trying to accommodate more workers with better hygiene practices.
What is the ‘New Normal’ for Construction Workers and Businesses?
All these hurdles urge our community to renovate our existing ways so that we could adapt to the ‘new normal’ as seamlessly and quickly as possible. But what is this new normal, let’s try to understand –
- Support from the Government – The Government of Australia declared construction works as ‘essential services’ during the lockdowns. To make things easier for building and renovation companies, governments of Victoria and New South Wales have implemented a number of new rules. You can now extend your operations on the weekends and on public holidays as well. Some renovation companies are also trying to acquire permissions to gain 24-hour access to their construction sites.
These initiatives might seem like small improvements, but they are wonderful examples to inspire everyone to start looking out for solutions in order to deal with the current situation. Also, the recently announced $130 billion ‘Job Keeper Stimulus’ would help support our businesses in these tough times.
- Focus on Government Funded Projects – The ‘new normal’ entails us to shift our focus to publicly funded projects, especially those projects which are directly or indirectly related to the healthcare sector. Other important sectors include – education and defence. This would automatically mean putting a temporary hold on the retail and residential projects, but this would greatly enhance our businesses’ chances of survival in the long run.
- Construction Costs Would Decrease – Since the number of projects has been reduced, you can expect a declining curve in the costs of constructions due to reduced demand for raw materials as well as labour forces. Also, because the economy would be severely impacted, investments on the other side of the pandemic would not be as robust as they were before.
- Recovery Rate – Building and renovation industry contributes to approx 9 percent of our country’s GDP. So, post-pandemic, we need to recover as quickly as we can to help our economy recover as well. It would be important to fast track pipelined projects and to keep working under somewhat strenuous conditions to the best of our abilities.
- Seek Professional Help – Since we are all dealing with an unknown and unfamiliar situation, at times when you have to make the big decisions, do not hesitate to seek professional help from lawyers, physicians, or insurance professionals. Especially if you have to send scheduling or project suspension notices, or you need to figure out anything related to workplace safety compliance or Occupational Safety and Health Administration contact an expert to seek his/her counsel.
It would also be beneficial to remain in touch with other owners, contractors, sub-contractors, and material suppliers. In these challenging times, we need to help each other out and together, we need to make sure we come out of this stronger and more resilient than ever before.
About the author: Sina Sadeghpour is Director of ImpeccaBuild. Providing interior fit-outs designed for the 21st Century, ImpeccaBuild combines stunning aesthetics with highly functional fit-outs. Passionate about designing projects that are innovative, sustainable and delivering excellent value. From project management through to design and fitout, ImpeccaBuild provides a complete end-to-end interior fitout solution for all industries.
