Post Covid 19 Impact on Construction Industry Sector

An excerpt of report prepared by Cytonn Investments a leading asset manager in Kenya analysing the impact of Covid 19 in the Construction Industry in Kenya as follows: 

Disruption of Supply Chains – There has been a negative impact on the supply chains as most developers source for construction materials from nations such as China. We expect this to translate to longer development periods owing to a shortage of resources and ultimately reduced building completions.

Lack of Project Finance - Decline in project financing will be apparent as lenders would be uneasy to finance construction projects owing to the current uncertainty in the economy coupled with delayed project completion dates thus, it will take longer for them to get returns on their investment.

Reduction of Labour - The pandemic’s direct impact in the Construction  sector has been the immediate reduction in the labour force as construction sites adhere to guidelines issued by the National Construction Authority (NCA) requiring contractors on-site to reduce the number of workers to a level that can allow workers keep at least a metre apart.

Absorption of Surplus Space - In the short term,we expect the slowdown in construction activities to help accelerate the movement of existing property inventory, thus, facilitating a demand-supply equilibrium in sectors experiencing oversupplies such as the retail sector.