Will construction sector in Maharashtra bounce back from 2nd wave?-Anil-Colliers
--By Anil Dwivedi, Deputy Managing Director, Project Management, Mid-India, Colliers
Since the outbreak of COVID 19, the construction sector has been one of the worst affected sectors, and the impact has been massive. Projects have been either stopped or put on hold, majorly due to restrictions in material movement and reverse migration of workers. In the latter half of 2020, when the Corona cases started declining, construction work began on a recovery path with adequate preventive measures and guidelines set by respective governments. Workers began returning to their work, and the construction sector started reviving slowly and steadily.
However, the second wave of resurgent COVID 19 virus seems more intense than the first one. The country recorded the highest number of cases globally per day—respective state governments imposed restrictions such as temporary lockdowns and night curfew. Fear of complete lockdown again triggered the migration of workers to their native states. But this time, taking lessons from the first wave, Governments have allowed the construction works to continue but with strict guidelines in place, resulting in lesser migration of workers.
Adequate preventive measures taken by developers and providing accommodation, food, and medical facilities at the site within their premises have helped workers stay at the site safely. Additional support from State and Central Government has helped develop confidence in workers who continue to work at the site instead of mass migration like the previous year.
Despite all the above actions taken, construction sites are still operating with half the workforce of actual requirements. The workforce and developers/contractors are also facing a shortage of material due to restrictions in material movement and slow production. All the deadlines are getting pushed back.
However, looking at the bright side, Maharashtra has already touched its peak; currently, COVID cases are on the decline, with a 40 percent peak. It has been a “model” state in the vaccination drive, and approximately 18% of the population is vaccinated. The Chief Minister’s initiative for 24 hours vaccination will also speed up the vaccination drive since vaccination is the only solution to contain the spread of COVID 19. The more areas vaccination is completed, Government will be able to lift restrictions gradually, and life can bounce back to normal. This will also help migrant workers from other States and restore the material supply chain.
In addition, initiatives from the State Government in terms of financial assistance package for construction workers, relaxations to developers, and reduced interest rates will undoubtedly help in reviving the construction sector in Maharashtra.
Input cost is a factor of key input prices like steel and cement, which saw a spike a few months back; the same has normalized now. The Maharashtra government’s move to reduce construction premium by 50% for the current calendar year has helped significantly.
The progressive unlocking by the Government will be a crucial factor for things to become normal and expect a pickup in the latter part of the year.
Today, the real estate market is one of the most resilient markets, shrugging off the pandemic’s related effects and achieving more significant than average figures in a short time.
Further, things will be challenging in the post-pandemic era, but the construction sector in Maharashtra is not new to challenges. It has always taken head-on and emerged as a winner. Though it may take some time due to delay in containing the second wave and expected the third wave, recovery is imminent.