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Coping with the New Normal - Covid-19 and after

The New Normal for construction industry – are we ready for it?

By Tadeusz Jachowicz, regional director CEE, Gleeds Polska director
Header jachowicz tadeusz


After more than three months of partial lockdown, including the most restrictive stages, through others that have led us to today’s situation, every sector of Polish economy faces a major challenge of adjusting to a new reality. As construction market players, we, our clients, business partners and all the parties involved in the real estate market must deal with that, as well.

It is a time when the world’s approach to business is changing as we had to put common health issues above the economy and our every-day habits. After the sudden closure of educational institutions, we had to reorganise our life to take care of our children, while keeping our work duties in order. We had to switch to a new reality of closed shopping centres, hotels, restaurants, bars, with no possibility to travel locally or abroad – the world literally stopped for a while, at its activity peak.

Around the world, there were countries almost paralysed by pandemic like Italy, Spain, or the UK, where work on construction sites stopped from day to day, leaving the workers uncertain of how tomorrow would look for them. In Poland, work on construction sites has been continued. We should appreciate employees who made this happen, as they kept working even in the time of the most restrictive lockdown, compromising their health.

As it seems that Poland’s construction market has not suffered as much as it could have done, we should not ignore the impact of the pandemic so far. This problem is not over, therefore there are many of factors that should be necessarily considered while planning our next steps. It is even more challenging given the fact that we do not have any case studies of similar situations.

Pandemic started at the time of a predicted economic slowdown

We should be aware that even without pandemic crisis, economists and experts have predicted a market downturn, that would be challenging to handle. The pandemic has become a catalyst for a forthcoming crisis.

How do we deal with the crisis?

As business leaders, we have to juggle factors related to the health and well-being of employees, the economic and social aspects and business continuity to achieve the optimal balance between them. We have to pass the exam of being socially responsible, while mitigating all the business loses and any difficulties that will appear.

Fortunately, on Poland’s construction market, the majority of companies managed to deal with the switch to working from home. It certainly affected activities and business relations – but dare I say it –  in a positive way. We  were all in it together, we all had the opportunity to meet our co-workers from a different side – not just a person in a business suit and demonstrating professional expertise, but also seeing the human side, with their children playing in the background, with pets making noises or their neighbours refurbishing their apartments. We used to focus mostly on the business role of people, working in an everyday hurry while overwhelmed with the pace of life. That turn of events will surely change our approach to working time and working place, as we have experienced that in this changed formula, we perform our duties satisfactorily, or even better.

What’s the pandemic impact on the construction and investment industry?

No matter how optimistic one can be, we should all be aware that soon there will be time, when we need to face the challenges that we didn’t expect. As an active construction-market player and consultancy with expertise and heritage, we think the industry may see a further reorganisation of its development strategies and design principles – as well as of construction itself. This will happen due to new a health-and-safety regime coming into force while we are all trying to remain as efficient as possible.

Investors and developers may be forced to face up to the transformation of demand for projects in particular sectors. The retail sector has been put to the test, as the lockdown caused substantial financial loss there. We observe tenants renegotiating rents. And changes in consumer behaviour will affect the retail sector, as people who had not made purchases online before started shopping that way during the pandemic and do not need the physical experience of going to the shops as much.

The residential sector may notice the slowdown, as many people have lost their jobs. The financial market has become more conservative and uncertain. We are also noticing the tendency to save money and postpone expenses. And banks have increased the amount of deposit required and the conditions for a home-loan have become more stringent.

Hotels and the tourism industry have now re-opened but with many restrictions which seriously impact their operations and profitability. It is hard to predict how long it will take the sector to recoup the financial losses from the last months.

The office sector, due to the huge difference in approach among the tenants after months of working from home, will probably see increased demand for new fit-out projects to adapt workspaces to new requirements creating more separation between employees.

All of the above factors may cause re-consideration of the function of ongoing projects.

The pandemic has had its impact on the design process, holding back entire developments, The slowdown of the authorities’ activities during the lockdown caused delays in all the formal aspects such as planning permissions.

Another issue that should be considered is the workforce. Many foreign employees went back to their native countries and it has become more challenging to find qualified executive workers.

Moreover, many building materials used to be imported from abroad. The closing of borders affected the fluency and costs of supply.

All these factors may result in a slowdown of construction work and a need to reschedule and reorganise. That may lead us to re-setting the budgets, because as everyone in the construction sector knows full well, the later we implement changes on the construction site, the higher are the costs of those changes.

As a result of this process, we may notice that many investors and developers have decided to suspend the start of new investments, and focus on finishing those project that they have already started and wait for more favourable condition of the market.

What’s next?

Gleeds Polska, as a team that survived the crises of 2001 and 2008, believes that the company’s strength is in the quality of work it provides, its adherence to best practice, sticking to solutions developed over the years, effective communication, flexibility, being perceptive, and ready for all possible scenarios.

We live in uncertain time. There are some entities that have already been badly hurt by the pandemic, but the ones that with a proper approach will survive this situation and get back to ‘normal’ as soon as it is possible –  but we cannot be sure of how the new normality will look like over the next few months .

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