Coronavirus: investments and health protection to overcome the emergency

The coronavirus emergency – COVID-19 – has quickly spread around the world, and the construction industry is taking its own steps to counter the expected impact on the sector, starting first and foremost with protecting the health of workers. From New Zealand to the United States, from Europe to Asia, groups involved in the construction of the large infrastructure projects are putting effective countermeasures in place to enable workers to continue doing their jobs, and where possible are already examining ways to develop new technologies. And some countries – like China first and foremost – are preparing new infrastructure investment plans as a way of dealing with the economic fallout of the pandemic.

China has mounted a strong response to the coronavirus emergency in economic terms, and it is focusing on infrastructure. The country is eyeing the end of the emergency, and has outlined the way forward in the coming months with a $3.6 trillion infrastructure investment plan aimed at restarting the economy.

These financial resources will used mainly to maintain and rebuild the country’s vast road network, with the aim of kickstarting work, production and wealth creation. In 2020, more than 10% of the entire planned budget will already be financed, amounting to $360 billion. Part of this sum will be raised through special bonds that the government issued in the first two months of this year.  The money will be invested first of all in the renovation of China’s 500 largest motorways, and secondly in the construction of new road links to serve agricultural regions in the south and east of the country. According to a study carried out just a few days ago by HSBC Holdings Plc, a 1% increase in infrastructure investment in China can lift GDP by 0.1%, which means that — if spending on infrastructure increases between 10%-12%, more than the 6%-8% previously — the impact on GDP growth could approach 5.7%, significantly reducing the damage caused by the health emergency.

They country is gearing up for this huge economic effort now that many of its regions and cities have emerged from quarantine and are slowly returning to normal.

And while China is already looking to the future after the emergency, in the rest of the world the construction industry is taking countermeasures to contain the negative impact on the sector, making protection of workers’ health as a top priority.

The biggest players in the sector are putting a series of measures in place around the globe to guarantee maximum security while work continues.

In the United States, especially the Seattle area and California where the virus is spreading more quickly, business associations in the sector have confirmed the plans to implement special safety measures in their worksites while keeping them open for business as long as possible. This is the policy laid out by the Associated General Contractors (AGC), which represents companies in the state of Washington.

The California AGC also confirmed that members have put special safety measures in place, according to U.S. website Contstruction Dive, and that worksites will remain open until they receive instructions from the authorities to do otherwise. One of the most effective tools to protect workers is using protective masks, particularly the N95 model, the one commonly used by workers on construction sites. Workers’ unions are also emphasizing safety.

“As union carpenters, safety is our No. 1 priority,” said Maria Coronado, lead representative of the Southwest Regional Council of Carpenters’ Los Angeles Local 213. “At the moment, our contractors have not reported a shortage of N95 masks in the Los Angeles area. If that shortage occurs, we will work together with our partners to find a solution that ensures our members remain safe on their jobsites.”

The spread of the virus and the inevitable decisions made by governments across the world to contain it will understandably have an impact on the construction sector, starting with exports. China is one of the world’s major suppliers of raw materials, particularly steel and cement. The backlash is being felt in New Zealand that Building Industry Federation CEO Julien Leys appealed to the government.

“What we are now starting to see is much more overall disruption in the supply chain, with everything from trucks unable to cross multiple borders, and ports being closed so containers can’t be shipped,” he said.

The blockade, however, is active in both directions. According to data from the New Zealand government, exports to China fell by $300 million in February alone.

The United States in particular has felt an impact on the blockade of exports of Chinese materials.

The consultancy and analysis firm Dodge Data & Analytics forecasts that the American construction industry will not be immune to the effects of the virus. In fact, 30% of building materials imported into the U.S. come from China, which is its biggest supplier.

Looking further afield, 17% of all building materials used on construction sites around the world.

The importance of staying safe during the Covid 19 emergency is a priority shared by all large groups and by the U.S. government. The Occupational Safety and Health Administration (OSHA), the Department of Labor agency, has drawn up a series of guidelines. Companies must follow them scrupulously. They range from the use of masks, to observing safety distances, to the sanitation of environments and compliance with precise rules in business travel. The OSHA has publicly stated that “the risk of transmission in the sector remains very low.”

The central issue today is to balance the need to protect public health with the need for development and work. This challenge will force large groups to look at process innovation and the adoption of new technologies, essential tools for a modernisation of the sector, now more urgent than ever.