Geosynthetic update: Impact Covid-19 on industry.
The construction & building industry and infrastructural projects are hit hard by the Covid-19 crisis. Projects are postponed, cancelled or continue at a slower pace. This impact, further strengthened by the recent drop in oil prices, has slowed down activities in basically all European countries and is expected to have a longer term effect.
Although the impact on the geosynthetics business was limited in the first quarter of 2020, apart from the effect in Southern Europe, the second quarter of 2020 will be different. Many producers report decreased activities in the different regions. The reasons for less activity vary in the different countries, some of the reasons are:
- Lock down in many countries
- Less funding available from the private sector
- Lack of workers in Western Europe, as many foreign workers have returned to their homeland
- Material availability
- The process for granting permits has slowed down, tenders are being postponed
Whatever the reason might be, the effect will not only be short but is expected to be long term. The EIB (Economic Institute Building – the Netherlands) expects a 15% shrinkage of the construction production on the short term and also on the longer term the construction industry will be hit seriously.
Many producers have already lowered their production, either willingly or enforced because of the lockdown or strongly reduced order intake. With the reduced expectations for the mid long term, further actions are expected. Not only in relation to outstanding obligations, orders and deliveries and the impact on company processes but also in relation to how to ‘’use’’ the time presently available to many different departments within the company. Items to look into can be:
- First and far most important, take care of your employees
- Review existing contracts or take steps to safeguard legal interests.
- Keep records, document the impact on the projects.
- Use time for other relevant items & issues