COVID-19’s Impact on the Construction Industry
Do you know the cost of construction materials for buildings has increased by up to 6.5 percent due to supply chain challenges resulting from the COVID-19 pandemic?
In a report by the Architectural Association of Kenya, the health sector records increased construction activities since the pandemic struck.
However, the increased demand for construction materials has been met by various challenges among them reduced construction material supply caused by the disruption of China’s distribution channels.
On the other hand, the real estate and construction sector has not been spared the economic disruption unleashed by the Covid-19.
The real estate sector was poised for accelerated recovery in 2020 to meet the rising demand for housing after a slow growth last year, something that might not pass as materials are inadequate.
According to the Architectural Association of Kenya, COVID-19 restrictions in China has impacted the cost of construction material.
Moving forward, developers having ongoing projects might be forced to drop some of their projects as prices of material take an upward momentum.
Even as countries start resuming operations and open their economy, the developers are encouraged to procure construction material and personnel locally for the sustainability of projects.
According to a consulting firm, Deloitte’s May report, supply disruptions, reduced demand, financial uncertainty, and decline in project financing are additional challenges facing the countries’ real estate sector due to the pandemic.
Also, delay in official approvals is another hurdle as operations in public offices have slowed down. The closure of land registries from February to May also affected property transactions greatly.
Therefore, even as the country weighs on safe ways to adopt while reopening the economy, I think it is high time the sector thinks of innovative approaches that can be utilized to construct and project financing. This is the right time to craft an innovative housing plan.
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