There are very few industries that have been left completely untouched by the COVID-19 global crisis. When it comes to the Indian real estate market, however, things seem to be taking a downturn. The Indian real estate market, and the residential sector, in particular, has been hampered by excess delays in project timelines, changes in regulatory provisions, decreased sales over the past couple of years, etc. The exact extent to which the Indian real estate market has been hit albeit is completely dependant on how long the crisis will last, and how long it will take for the economy to get back on its feet. Numerous analysts believe that the economy might be heading for a recession much like the one that the world witnessed back in 2008. However, it might not necessarily be the case that the Indian real estate market especially the construction sector, will continue to falter.  

The Situation So Far

The COVID-19 pandemic has had a drastic negative impact on all construction projects not just in India, but the world over. The exact indications of this impact differ from nation to nation as well as the sort of contract that a construction company is obligated to. The pandemic has rendered almost all construction projects difficult to finish. There are numerous reasons for this, including – 

• the returning of the construction sector’s labor force (who come from rural areas to work in the cities), back to their hometowns as a result of the lockdown coming into effect, 
• government-imposed shutdowns of industries including the construction sector, and
• a pause in the global supply chain, causing a halt in the importing of necessary construction materials and equipment (the vast majority of which comes from China).

Although most of these projects have been temporarily paused with the intention of recommencing construction once the lockdown is done with, and travel is allowed, there are no indications that this will happen anytime soon. This is because even if the lockdown is lifted and the vast majority of the construction labor force returns back to work, the global supply chain will still need to get back to work. 

With global trade deals with China on the verge of collapse owing to increasing anti-China sentiments, new trade deals with other countries might have to be struck. This means that until these deals are struck, the supply of critical construction materials and equipment will still remain halted. 

The Positives

The majority of governments, however, have not called for a complete halt in all construction activity, owing to the implications that this can have not just on the real estate market but also the economy in general. The significance of continuing to develop infrastructure and carry on with all ongoing construction projects means that a lot of crucial projects are still very much up and running. 

It is only a matter of time before other state governments begin realizing that the shutting down of the construction sector might not be in their best interests and reinstate them again. Another reason is that most of the labor force working at construction sites live within the confines of these sites and do not mingle or engage with people from the outside, except for the occasional visit from a site engineer, overseer, etc. Such people might be in better positions to comply with the sort of quarantine measures and self-isolation measures than workforces belonging to most other industries. 

Scaling Up Construction Productivity Will Be The Key To The Recovery Of The Construction Sector

At this rate, even if the economy does get back on track, trade does resume (causing the global supply chain to get back on its feet again), and the spread of the pandemic dies down (meaning the construction labor force can return back to work), productivity still might not get back on track, considering that the monsoon soon approaching. Construction productivity tends to take a hit during the monsoon season. 

However, if smart decisions are made, and construction projects are prioritized, then it is possible to scale up construction productivity. Focussing on restarting halted construction projects where the virus hasn’t had much of an impact should be the first step towards recovery.