Industry | Impact of the epidemic on construction companies

If it is a normal year, most of the construction projects of construction companies will start around the fifteenth day of the first lunar month, and the builders have entered normal working conditions.
However, this year’s new crown pneumonia epidemic disrupted the rhythm of the engineering industry, except for the construction and renovation of hospitals.
Very few other projects have started; when construction companies can enter normal working conditions is still a big unknown, and it depends more on the control of the epidemic.
So what impact does the new crown pneumonia epidemic have on the engineering industry? The first is the impact on the project's resumption of work.
Under normal circumstances, most engineering companies will hold various work meetings before the tenth day of the first month to make work arrangements for the New Year and make various preparations for the start of construction.
After the Lantern Festival, construction workers returned to the construction site one after another.
The pause button during the Spring Festival holiday was cancelled, and the flow of people, logistics, information, and capital quickly entered a normal state.
The new crown pneumonia epidemic has disrupted the rhythm of the engineering industry.
People cannot flow and gather, materials cannot be transported normally, and the supply chain of the industry is at a standstill.
Except for the construction and transformation of emergency hospitals, most projects are still at a standstill.
At present, the government adopts strong measures, not only to avoid the spread of the epidemic, but also to eliminate the virus in the shortest possible time, so as to reduce the impact on society and the economy.
The time to resume work in the future is obviously determined by the situation of epidemic control.
If the epidemic is effectively controlled, work may be resumed in a relatively short time.
If the epidemic control is difficult, the time for resumption of work will continue to be delayed; regionally, the degree of influence in different regions, There will also be differences.
The southern area is larger than the northern area (even if there is no epidemic, most outdoor projects in the north are still difficult to start for a period of time after the Spring Festival), the areas with severe epidemics are greater than areas with less severe epidemics, and urban areas with dense traffic and population.
Greater than areas far from the city.
The project is the foundation of the operation and management of the construction enterprise.
Without the advancement of the project, other work has lost the foundation of support.
The enterprise has no billable engineering volume, and it is difficult to form a turnover and return payment, which means that the enterprise is in the time period of controlling the epidemic.
, At a standstill.
Judging from the current situation, the impact time of the project construction period in the southern region should be more than one month, and the impact time in Hubei Province is longer.
These will all put pressure on the completion of the project enterprise's annual goal.
The second is the impact on project costs.
The social cost is the lowest when the years are quiet, and the project cost is the lowest when the construction period is balanced (reasonable).
For projects started before the epidemic is completely over, it is necessary to solve various difficulties in project advancement, gather personnel to avoid the spread of the epidemic, which will increase the cost of epidemic prevention and loss of work efficiency; solve the logistics and transportation problems during the epidemic, and due to the epidemic Bringing supply chain imbalances and material shortages will also increase the cost of the project; even if it can overcome difficulties and resume work, with the current requirements of 14 days for local governments to isolate the influx of people from different places, the possibility of short-term construction projects is very small.
Treating the cases of the project as an engineering accident, and no enterprise dares to take risks and promote the implementation of the project.
After the epidemic is over, with the resumption of a large number of engineering projects, resources such as personnel, materials, and equipment will quickly enter the peak period of demand.
The epidemic has brought imbalances in the industry supply chain, which will cause resource shortages for the entire industry, and may cause various Resource prices are rising rapidly, and even if high prices are accepted, it is difficult to find corresponding resources to make up for it.
Cost pressure and schedule pressure will follow one after another.
The supply chain of the engineering industry is a social system, and any link imbalance will pose a challenge to the industry.
Some companies are doing engineering projects in developing countries overseas, and the shortage of materials, unskilled workers, and even basic electricity have to be solved by themselves.
After comparison, they deeply feel the completeness of the domestic engineering construction industry supply chain.
Under normal circumstances, the supply chain of the Chinese engineering industry is one of the most complete and effective supply chains in the world.
It is such a supply chain that supports the high-efficiency and low-cost advancement of construction projects.
The new crown pneumonia epidemic has caused regional division, stagnation of logistics, and personnel staying (isolation).
It takes time for such a large supply chain to return to a normal state.
However, the currently stagnant supply chain may be Confusion and imbalance will have a negative impact on project cost and efficiency.
The third is the impact on the construction industry market.
The short-term impact of the new crown pneumonia epidemic on the construction industry market is negative.
The short-term impact on the construction industry market is to postpone the progress of project contracting: the current government’s focus is on controlling the epidemic and ensuring people’s normal lives.
It is obvious that the contracting speed of projects in the infrastructure market has slowed down; the real estate industry has lost the Spring Festival sales season.
Enterprises have large inventories and slow capital return, which may also slow down new projects; most manufacturing enterprises will have certain difficulties in capital due to the impact on production, and construction investment may also be delayed.
Investment in infrastructure, real estate, and manufacturing accounted for 75% of the country’s fixed asset investment.
The impact of the epidemic on the outsourcing of projects in three important construction areas will inevitably reduce the value of newly signed contracts for construction companies.
Most of the newly signed contracts of construction companies in the first quarter will Will drop drastically.
However, from the perspective of the whole year, the situation may not be very pessimistic.
The government will adopt active policies to hedge the impact of the epidemic on the economy and investment.
This does not mean that the amount of new contracts signed by construction companies will fall this year.
At present, we see that the government has begun to increase fiscal and monetary policy support for economic growth, banks are increasing financial support for enterprises, and some places have begun to introduce tax support policies, the payment of land transfer fees in the real estate industry and new houses.
There are also signs of adjustment in the sales policy.
It is foreseeable that it is inevitable to increase infrastructure investment, to moderately loosen real estate policies, and to relax the scale of debt issuance and refinancing by capital market companies.
These will all have a positive effect on the increase in fixed asset investment.
The growth of fixed asset investment in 2018 and 2019 is less than 5%, and the investment growth in 2020 is likely to exceed 5%.
The increase in fixed asset investment will bring better market opportunities for the construction industry.
The fourth is the impact on enterprises.
The sudden pneumonia epidemic has brought unexpected challenges to most construction companies.
Excellent catering companies think they can survive the three-month shutdown.
How long can construction companies survive? I think that in the face of the current epidemic, the construction industry’s ability to resist risks is stronger than that of the catering industry.
This is not only because the Spring Festival is not the peak season for the construction industry, but also because the cost structure of the construction industry is different from that of the catering industry.
Flexible employment reduces the cost of the company during the shutdown period and diversifies the risk of the company; however, the impact of different construction companies is also different.
The impact of the epidemic on companies in the southern region of the market is greater than that in the cold regions of the north.
Companies with financial leverage have a greater impact on companies with low financial leverage, and companies with project joint ventures have a greater impact than companies with self-operated projects.
authorI think that the pneumonia epidemic is an immunity test for the whole society.
Individuals, families, companies, cities, and society are all facing this comprehensive test to test our ability, conduct, and coping strategies; the pneumonia epidemic will naturally cause the construction industry.
With a relatively large impact, construction companies will have a period of stagnation.
Compared with the epidemic itself, the test of the epidemic’s immunity to construction companies has just begun.
The strength of the company’s risk tolerance and the self-improvement ability of teams at all levels to deal with challenges.
It will be reflected in the next few months; if you face it calmly and deal with it properly, the company may successfully tide over the current difficulties; if the organization is weak and respond to errors, it may also have a relatively large impact on the company.
I think that the pneumonia epidemic is an immunity test for the whole society.
Individuals, families, companies, cities, and society are all facing this comprehensive test to test our abilities, conduct, and coping strategies; the pneumonia epidemic will naturally cause the construction industry.
With a relatively large impact, construction companies will have a period of stagnation.
Compared with the epidemic itself, the test of the epidemic’s immunity to construction companies has just begun.
The strength of the company’s risk tolerance and the self-improvement ability of teams at all levels to deal with challenges.
It will be reflected in the next few months; if you face it calmly and deal with it properly, the company may successfully tide over the current difficulties; if the organization is weak and respond to errors, it may also have a relatively large impact on the company.