The Impact of COVID-19 on the Construction Industry in China
The COVID-19 epidemic emerged prior to the start of Chinese Lunar New Year, the most celebrated time of the year in the People’s Republic of China (“PRC”), during which millions travel across the country to their hometowns.1
Officials reported the first case of COVID-19 in Wuhan City in Hubei Province and the city was placed under lockdown by the Chinese Government on 23 January 2020, with other provinces following within days. The seven-day long Lunar New Year holiday was extended to 9 February 2020 in an attempt to contain the outbreak. There were 66 cities in China which were placed into lockdown for a period ranging from 50 to 76 days. Wuhan City, the epicenter of the pandemic, was the longest to be in lockdown.
How will construction projects be impacted?
The most reported impact arising from COVID-19 is the acute shortage of labour. China’s construction industry is heavily dependent on rural migrant workers, and according to the National Bureau of Statistics of China2, 54 million rural migrant workers are working in the construction industry. Migrant workers who had returned to their hometowns for the Lunar New Year holiday were unable to return to worksites after the lockdown.
In a survey conducted by the China Construction Industry Association3 published on 15 April 2020, which 804 enterprises took part in, 90.55 percent of respondents said progress was negatively affected and 66.04 percent reported a shortage of labour.
1: Ministry of Transport of the People’s Republic of China. 9 January 2020. “大数据！2020年春运客流预测分析在这里” (In Chinese Language). http://www.mot.gov.cn/fenxigongbao/yunlifenxi/202001/t20200109_3323840.html
2: National Bureau of Statistics. 30 April 2020. “2019年农民工监测调查报告” (In Chinese Language). http://www.stats.gov.cn/tjsj/zxfb/202004/t20200430_1742724.html
3: China Construction Industry Association. 15 April 2020. “Investigation Report on How Covid-19 Impacted the Chinese Construction Enterprises” (in English and Chinese Language). http://www.zgjzy.org.cn/menu20/newsDetail/8428.html