The impacts of COVID-19 on construction business

Le Ngoc Ho (left) is the director of Indochine Engineering, who has more than 25 years of experience in building engineering services, project management and sustainability. Nguyen Ha Trang (right), CEO at Core Asia Project Management, has more than 10 years of experience in the industry as a consultant, undertaking high-end real estate projects in Vietnam. In light of COVID-19, Ho and Trang believe that adaptability is key to sustaining businesses; and that risk assessments should be conducted to map out the actual impacts of the pandemic on the construction industry. 

Before the movement control, were there concerns from workers on-site about possible infections? What measures were put in place in light of the virus outbreak?

NHT: We did not receive any reports from our workers on-site, so I believe they have not been infected with COVID-19, at least not under our supervision. Since the outbreak was first recorded in Vietnam, we have put various measures in place. We provided site workers with additional insurance and funding to buy necessities such as face masks. We also implemented disease control procedures as advised by the government to minimise the spread, both on-site and at workplaces; as well as preventive measures such as disinfection, temperature checks and social distancing. To ensure workers’ well-being, we have also created three different scenarios for operations, finance and human resources, including the worst-case scenario when all sites are closed. If that is the case, we will offer financial support to our workers. These scenarios will be evaluated and updated continuously to choose a plan that will suit the ever-changing situation.

LNH: Because it was such a huge concern for site workers and the larger community, we immediately sent workers home to contact their families and friends. We also did temperature checks and environmental cleaning to help minimise the outbreak.

Read: The Hardest Hit by COVID-19

How have your businesses been impacted by the outbreak?

NHT: Currently, about 50 per cent of our projects have been impacted. The rest of our projects are still operational, but with slow progress to ensure the safety of our workers. The suspension has also been estimated in our three scenarios, so the ongoing operations are still under control.

LNH: Business is going down by approximately 30 to 40 per cent. With work-from-home (WFH) measures being implemented, work effectiveness has undoubtedly declined.

Read: How have business and labour demand in the construction industry been impacted by the COVID-19 pandemic?

Some construction projects are still operational but progressing more slowly due to health and safety concerns; image by Daniel Ferrer Paez/Shutterstock

What are the longer-term impacts of COVID-19 on construction industry in Vietnam? And what’s the forecasted market for the next three to six months?

NHT: Fortunately, the construction industry is not the most affected, compared to airlines, tourism, and food and beverage. However, the longer the suspension and the more people are affected, the lower the company performance will be, which might even lead to a crisis. The worst that could happen is that market demands would decrease in all sectors, and this would definitely impact the long-term operations of real estate and construction. However, there are still opportunities for certain housing markets to remain stable due to its consistent demands.

LNH: In my opinion, the industry will go down by about 70 to 80 per cent in the next three to six months, but as soon as the pandemic is under control, the construction industry will resume and hopefully, return to normal.

Read: Construction sector in the new normal: How have SMEs and job market been impacted?

How have business operations changed since the outbreak started?

NHT: Eighty per cent of our jobs are required to be implemented directly on-site, so working from home (WFH) is not feasible, except for pre-construction management and back-office teams.

LNH: Technologies play a key role during WFH, and staff members are adapting well to this scheme. This and the social distancing practice may change the work environment permanently after the pandemic is over. An appropriate choice to ease remote work is the use of cloud-based system. In the future, businesses will adapt and switch their working methods to anticipate undesirable situations like the pandemic.

Aside from the direct impacts, the global pandemic also has indirect impacts such as the fear of uncertainty; image by: worawit_j/Shutterstock

How has the government helped mitigate the impacts of COVID-19? What do you expect the government to further address?

NHT: Since the outbreak started, I appreciate and rely on the actions taken by the Vietnamese government. I hope the government aims to conduct a systematic risk assessment in each region to identify the types of work being impacted and the severity of the impacts. This will help mitigation and ensure business continuity.

Read: Protecting Construction Workers in the New Normal

Epidemiologists believe that vaccines for COVID-19 will not be available in the next three or six months. Even if it was available, procurement for all the countries would not be easy. Consequently, this would trigger another wave of crisis in the coming months or even longer. For the time being, society would have to adapt and adjust to the current situation. As a player in the construction industry, we need to increase our agility and adaptability to a constantly changing context, and in a way that has never been done before.

LNH: The COVID-19 outbreak is not only a concern of an individual government, but the world as a whole. The Vietnamese government is controlling the situation to the best of its ability. However, the approach should be holistic and covers not only the health sector, but also the economy. The death toll of COVID-19 is worrying indeed, and this has surely affected the mental well-being of construction workers, but we need to also consider the indirect impacts such as the fear of uncertainty and job security. We hope that there will be safety nets to mitigate these indirect impacts.

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