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Lockdown forcing construction sector to think more strategically about tech adoption According to the results of a survey conducted by Construction Computer Software ( CCS
Lockdown forcing construction sector to think more strategically about tech adoption According to the results of a survey conducted by Construction Computer Software CCS amongst its clients, stakeholders and industry partners, the lockdown has compelled the construction industry to think more strategically about the adoption of technology, especially as it relates to communication and collaboration. The survey was conducted to establish how the construction industry has been affected by the lockdown and what measures players are putting in place to manage the current situation, as the sector is expected to play a major role in South Africa s economic recovery post the Covid pandemic Project disruptions and delays Some of respondents said all their projects have been affected by disruptions or delays due to the Covid pandemic and of respondents from companies with a revenue of more than R bn indicated that of their projects have been delayed or disrupted. These disruptions and delays are as a result of the lockdown measures enforced by government, as well as shortages of materials, plants and equipment and PPE. CCS CEO Andrew Skudder says while respondents expect all construction sectors to be affected by the pandemic in the short term, the building sector is expected to be the most affected. The building sector is primarily funded by private sector clients, who are expected to cut back on investments due to the anticipated economic decline as a result of the Covid pandemic Residential and retail investment is likely to be most affected due to significant job losses, growing consumer financial stress and a lack of confidence following the Covid enforced lockdowns. He adds that infrastructure spending, including civil and roads, is expected to be less affected as this tends to be government funded. Respondents suggest that government is likely to accelerate its infrastructure spend programme in a bid to accelerate economic recovery and absorb unemployed labour into the employment market as quickly as possible. Mining is expected to be least affected. Private clients most affected of respondents said private clients would be the most affected. Business and consumer confidence have been negatively affected by the Covid pandemic and lockdowns, which is expected to result in a decline in GDP in This supports the view that the building sector will be most affected as it is primarily funded by private clients. State owned enterprises, such as Eskom and Sanral, are expected to be least affected. Eskom, in particular, is an essential service provider and has significant build programmes under way which have not been affected by the lockdown. In addition, water authorities such as Rand Water, which is an extension of national government, are also expected to be less affected as they too provide essential services, with infrastructure requiring ongoing maintenance and upgrading. Skudder says of respondents indicated that on more than of their projects, clients have invoked force majeure clauses on their projects. Smaller companies seem to have been less affected with of companies with less than R m revenue having more than of their projects affected. This compares to of R m to R m of R m to R bn and of R bn plus revenue companies. Companies with a revenue of between R m and R bn seem to have had the highest level of force majeure being invoked, with of R m to R m companies having to of their projects being affected, compared to just for companies with revenue of less than R bn Managing the challenges presented by the pandemic Skudder says a few major themes emerged in the survey. One was the increased need to keep the channels of communication open, especially with employees, but also with clients and other stakeholders on projects. It is undoubtedly healthier for businesses if people feel informed in times of great uncertainty. "Cost management is another obvious theme, with companies implementing measures to manage costs and ensure liquidity stretches for as long as possible. Interestingly, organisations have been terminating rental of plants and negotiating insurance premiums. He says the construction industry is highly commercially driven, with stringent contracts in place that regulate the relationship between contractors and their clients. Various steps need to be taken by construction companies to ensure they position themselves for recovery and for the commercial entitlement they will need to establish as a result. In light of the changes to the project created by the pandemic, critically discuss the importance of setting project baselines on MS Project and lay out clearly, the steps that are required to set a baselin
Lockdown forcing construction sector to think more strategically about tech adoption
According to the results of a survey conducted by Construction Computer Software
CCS
amongst its clients,
stakeholders and industry partners, the lockdown has compelled the construction industry to think more strategically
about the adoption of technology, especially as it relates to communication and collaboration. The survey was conducted
to establish how the construction industry has been affected by the lockdown and what measures players are putting in
place to manage the current situation, as the sector is expected to play a major role in South Africa
s economic recovery
post the Covid
pandemic
Project disruptions and delays
Some
of respondents said all their projects have been affected by disruptions or delays due to the Covid
pandemic and
of respondents from companies with a revenue of more than R
bn indicated that
of their
projects have been delayed or disrupted. These disruptions and delays are as a result of the lockdown measures
enforced by government, as well as shortages of materials, plants and equipment and PPE.
CCS CEO Andrew Skudder says while respondents expect all construction sectors to be affected by the pandemic in the
short
term, the building sector is expected to be the most affected.
The building sector is primarily funded by private sector clients, who are expected to cut back on investments due to the
anticipated economic decline as a result of the Covid
pandemic Residential and retail investment is likely to be most
affected due to significant job losses, growing consumer financial stress and a lack of confidence following the Covid
enforced lockdowns.
He adds that infrastructure spending, including civil and roads, is expected to be less affected as this tends to be
government funded.
Respondents suggest that government is likely to accelerate its infrastructure spend programme in
a bid to accelerate economic recovery and absorb unemployed labour into the employment market as quickly as
possible. Mining is expected to be least affected.
Private clients most affected
of respondents said private clients would be the most affected. Business and consumer confidence have been
negatively affected by the Covid
pandemic and lockdowns, which is expected to result in a
decline in GDP in
This supports the view that the building sector will be most affected as it is primarily funded by private clients.
State
owned enterprises, such as Eskom and Sanral, are expected to be least affected. Eskom, in particular, is an
essential service provider and has significant build programmes under way which have not been affected by the
lockdown. In addition, water authorities such as Rand Water, which is an extension of national government, are also
expected to be less affected as they too provide essential services, with infrastructure requiring ongoing maintenance
and upgrading.
Skudder says
of respondents indicated that on more than
of their projects, clients have invoked force majeure
clauses on their projects.
Smaller companies seem to have been less affected with
of companies with less than
R
m revenue having more than
of their projects affected.
This compares to
of R
m to R
m
of
R
m to R
bn and
of R
bn
plus revenue companies. Companies with a revenue of between R
m and R
bn
seem to have had the highest level of force majeure being invoked, with
of R
m to R
m companies having
to
of their projects being affected, compared to just
for companies with revenue of less than R
bn
Managing the challenges presented by the pandemic
Skudder says a few major themes emerged in the survey.
One was the increased need to keep the channels of
communication open, especially with employees, but also with clients and other stakeholders on projects. It is
undoubtedly healthier for businesses if people feel informed in times of great uncertainty. "Cost management is another
obvious theme, with companies implementing measures to manage costs and ensure liquidity stretches for as long as
possible. Interestingly, organisations have been terminating rental of plants and negotiating insurance premiums.
He says the construction industry is highly commercially driven, with stringent contracts in place that regulate the
relationship between contractors and their clients.
Various steps need to be taken by construction companies to ensure
they position themselves for recovery and for the commercial entitlement they will need to establish as a result. In light of the changes to the project created by the pandemic, critically discuss the importance of setting project
baselines on MS Project and lay out clearly, the steps that are required to set a baselin
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