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Proactive steps to mitigate the impact of Covid-19 in the construction industry

COVID-19 is having far reaching impacts on the construction industry’s supply chains, cash flows and workforces. Even if the spread of the virus is contained in the short term, companies will feel the effect for month to come. The following are some of the proactive steps to mitigate the impact of Covid-19 restrictions; according to Deloitte:

Also Read: Construction site operating procedures for UK workforce during Covid-19

  1. Construction Contracts: Companies need to understand their contractual rights and responsibilities for each project in order to minimise disputes further down the line. In particular, clauses that refer to force majeure, government intervention or legislative changes need to be considered carefully;
  2. Customers: Frequent engagement with customers is key to managing expectations
    and effects on their projects.
  3. Workforce: Managing staff costs & engagement in the face of business disruption is critical now that all construction sites save for those projects deemed critical have been shut down. Firms need to assess reducing people costs and making payroll. This can be achieved by;
  • Pay alternatives
  • Capacity planning
  • Evaluation of critical staff requirements and retention of key skilled staff
  • Industrial relations engagement

4. Site Security / Health & Safety: Now that most construction sites have closed for a minimum of 2 weeks (likely longer), it is important that the following matters are considered;

  • Sites have appropriate security measures in place and procedures implemented for maintaining critical site holding infrastructure;
  • Any health & safety risks are mitigated in the short terms;
  • Insurance policies are reviewed in detail to ensure all cover requirements for closed sites are adhered to – if in doubt over any measures, insurers should be engaged with immediately.

5. Supply Chain / Critical Suppliers / Sub- Contractors: It is critical to constantly monitor the end-to-end supply chain disturbance and how this may affect product scarcity in both the short and medium term. Companies should also draft alternative supply contingency plans and pro-actively search for alternatives for critical goods and services in order to have options once sites reopen.

6. Reforecast trading and cash flows: Companies should review, in detail projections for the next number of months and identify what mitigating actions can be taken to preserve cash in the short/medium term.

Dennis Ayemba
Country/ Features Editor, Kenya

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