A consultancy firm Arcadis believes that once the Covid-19 restrictions are lifted work on construction sites could theoretically start quiet quickly if problems around supply of labour and material can be overcomed once the industry restarts.
How can the construction industry overcome the supply chain capacity risk to put itself on the best possible footing for recovery post Covid- 19?
Supply chain capacity to be biggest construction industry risk
Findings from the company’s UK Construction Market View spring 2020 report indicate that the Construction industry will need to look ahead to business recovery and act now to secure ongoing supply.
Past recessions suggest that construction activity tends to overshoot shocks in the wider economy, so the effects for the sector could last for longer.
However, a consultancy firm Arcadis believes that once social distancing restrictions are lifted work on construction sites could, theoretically, start quite quickly - if problems around sourcing labour and materials can be overcome as the market restarts.
Recommended measures in an 8-point plan put forward by Arcadis include tactical scenario planning, rescheduling or de-scoping of work and reviewing relevant contract clauses to help mitigate short term risk.
According to the report, strong relationships with suppliers will be key to re-establishing work programmes and clearing backlogs as efficiently as possible, while also preparing for post Covid-19 opportunities.
However, the firm has said that as the exit strategy from lockdown has not yet been defined and the full impact on demand is yet to be assessed, the forecast is necessarily subject to a high level of uncertainty.
Arcadis head of strategic research Simon Rawlinson said that “plotting the potential course of this crisis is not easy”.
He added that the forecast is based on “a realistic but positive scenario” but added that there are “many potential outcomes”.
Rawlinson explained: “The outlook assumes that the economy will keep going into 2021, the construction pipeline will be sustained, and the supply chain will hold its nerve.
“Regrettably, if the market does fall away, there will be very few clients who are able to benefit from any downturn, so it is vital that – even in the midst of the crisis – we look at how the industry can implement resiliency measures that will put it on the best possible footing for recovery.”
It has predicted that despite the potential for recovery in public sector investment and infrastructure related to programmes like HS2, it will take many private sector markets - including housebuilding and commercial development – until at least 2022 to return to growth.
This article was first published here
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