Construction

The Impact of COVID 19 & Brexit on the Construction Industry

On the surface, our economy is normalising. Shops are reopening, people returning to work, and there seems to be light at the end of the tunnel. Does this mean COVID-19 and Brexit are no longer issues? Far from it. Their effect on the construction industry has been pronounced and continues to cause disruption in many ways.

To a degree, then, the construction industry is still vulnerable. Materials are expensive to buy and there are labour shortages too.  This means the sector must now mitigate a complex range of economic and health-related risks. 

Which risks pose the greatest threat? Here are our four of the biggest.

1. Labour shortage, supply, and materials

Labour shortfall

UK labour shortage continues to be an issue. As recently as July this year, construction workers had been forced to stay at home – because they’d been in contact with people who’d tested positive for COVID-19. Then, on the 16th of August 2021, the rules changed.

Now, if a construction worker is pinged, they don’t have to isolate. But only if they’ve been double jabbed. Otherwise, they will have to quarantine. Regardless, anyone testing positive for COVID-19 will have to remain at home for the designated time frame.

The impact on labour shortage varies regionally. Some constructors have had to refuse contractors because they cannot commit to a plan of delivery for their clients Meanwhile, others have experienced minimal service blips at best  – meaning they can meet client obligations without any difficulty. 

Materials shortage

Since July, materials have been in short supply. Fuelled in part by the pandemic and Brexit, this crisis predominantly affected the construction sector – slowing its growth at a critical point of economic recovery. Costs rose, too. Which meant beleaguered construction firms had to pay more for materials and pass those costs on to their customers.

 

2. The importance of  force majeure

The escalating costs of materials, coupled with a declining labour market, have shaken the construction industry to its core. Firms have become more risk-averse as a result, digging deep into the frameworks of their legal contracts to ensure they’re adequately protected.

By preparing for – and managing – risks posed by COVID-19 and Brexit, it may be possible to avoid (or reduce) delays, disruptions, project overruns, and other unforeseen changes defined in the scope of works. That’s why force majeure is so important.

Why Force Majeure matters

Almost all construction contracts include force majeure clauses. But the term ‘Force Majeure is not finite. Instead, its meaning varies – depending on the contractual wording defined by the involved parties. Contractors should, therefore, carefully scrutinise the small print in contracts they sign. That way, they will be aware of their rights and any consequences that might directly arise from force majeure if certain events were to occur.

So what is Force Majeure?

It is an event that could not have been anticipated when the contract was signed.  However, there is no solid definition of the term in UK law. . Could this cause a problem for contractors? If no concrete definition of ‘Force Majeure can be agreed upon, then how can it be invoked? And, even if it could, surely its meaning could be challenged in a court of law.

To further complicate things, force majeure isn’t always needed. For example, no such clause is included in NEC contracts. But it’s always caveated into a JCT contract. 

The key question here though is:  can constructors use force majeure to protect themselves from risks caused by COVID-19 and Brexit? To answer that question, we need to look at how constructors are communicating with their stakeholders.

 

3. Improve your communication

Keep things compliant

Poor communication can slow a project down; either that or cause it to fail. Then there’s the legal dimension: continuously clear dialogue is essential if all parties are to ensure health and safety measures are properly implemented and government directives followed.

Think outside the contract

Clear communication links in with force majeure. Constructors and other stakeholders in the process need to protect their businesses from harmful consequences. But approaching a contract literally isn’t always helpful. Especially if, by doing so, the outcome will be unprofitable. 

This means all parties should interpret the contract with an open mind to ensure the best possible outcome. As such, any force majeure clauses included should allow for some flexibility – meaning the project has a greater chance of proceeding (which is surely in everyone’s best interests).

 

4. Integrate your technology

COVID-19 has tested the construction industry and acted as something of a proving ground for businesses operating within its space. Those that wisely invested in technology emerged better from the fray. Those that didn’t either struggled or disappeared from the map completely.

In all fairness, the construction sector has been late to the party compared to other industries that embraced the benefits of digital technology early on. Nonetheless, the sector has used such tools wisely in the face of great adversity.

What’s trending in technology?

Cloud technology is the driving force behind the construction sector’s digital shakeup. But how does it work and what effect is it having in the fight against COVID-19 and Brexit? 

Seamless app integration

Constructors can’t afford to miss a beat when it comes to analysing, sharing, and understanding data. Failing to recognise errors or operational efficiencies is harder and far more time-consuming if the information is distributed across multiple systems. 

That’s why modularised systems that act as a one-stop-shop – providing construction companies with a high-level overview of all their data – are increasing in popularity. Understanding how, when, and why COVID-19 or Brexit is impacting your business will be easier if you adopt this approach.

Simulate your projects

Why visit a site when you don’t have to. You’ll be exposing yourself – and your teams  – to unnecessary harm and increasing the chance of infection. That’s why Business Information Modelling (BIM) is the smart choice for companies keen to avoid risk and speed up their communication and analysis.

With BIM software, you can create virtual replicas of your project. Aside from minimising the risk of contagion, you’ll also:

  1. Save money. You can review information remotely without spending money on transportation costs. Additionally, your employees won’t have to take large chunks out of their working days to attend site visits.
  2. Share faster. You’ll be able to spot tell-tale trends faster and take evasive action. With a manual or non-integrated system, that wouldn’t be possible.
Get real time insights

As if BIM wasn’t enough, you can now view sites remotely – without the need to garb yourself in PPE and drive to a far-off location. This again reduces exposure time for your busy teams who already have enough to do. 

 

5. Digitise your documentation

Documentation often gets overlooked. And yet the success of a construction project can depend on the quality of its health and safety file – a complex and wide-ranging document designed to anticipate the needs of the project and ensure a duty of care to everyone involved.

Then there are risk assessments, which are a legal requirement under the 2005 Safety, Health and Welfare Act. These documents need to be prepared so that inspectors visiting a site know what’s being done to safeguard the wellbeing of those working there.

A risk assessment would involve:

  1. Looking at how COVID-19 could be transmitted on site
  2. Calculating the likelihood of exposure
  3. Identifying those most at risk
  4. Creating controls to manage risk

And so documentation is an invaluable tool that contractors can use to reduce the threats posed by COVID-19. But to work most effectively, the process should be digitised. 

Digitise your documents and you will:

  • Only need to add values once – after that, data will be pulled through automatically
  • Be able to create templates for specific file types – including risk assessments and O & M manuals
  • Import all your stock and customer data right from day one 
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Why make your document creation process harder, when things are challenging enough already? With a system like Dokkit, you’ll be able to save time, money, and keep one step ahead of those competitors still relying on old-fashioned manual systems.

 

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Dokkit provides businesses in the construction sector with a cloud-based, digital O&M manual template system. Fast, easy and affordable.

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