Overall economic situation causing construction sector slowdown– Chamber of Architects
The economic downturn caused by the COVID-19 outbreak on the island is resulting in a slowdown in the construction sector due to a number of factors, and if the current trend persists, layoffs in architecture and civil engineering firms will also be inevitable.
While many believe that the construction sector is still doing well, given that construction on the island is still ongoing, the reality seems to be quite different.
Speaking with this newsroom, Chamber of Architects and Civil Engineers President, Perit Simone Vella Lenicker and VicePresident, Perit Andre Pizzuto highlighted that the sector is facing an array of issues.
The government has issued three sets of economic support measures thus far, however hardly any of these target the professional and the construction sectors, Vella Lenicker said, while highlighting that architects depend on their clients for work.
“All sectors have been impacted, with some in the tourism and retail sectors already telling members of the profession to halt all projects that were ongoing. In some cases, we have already been told that we will not be paid for services already rendered. We expect that as other industries slowdown, such an impact will increase.”
She explained that the Chamber of Architects has teamed up with the Chamber of Advocates, the Kunsill Nutarili Ta’ Malta, the
Malta Institute of Accountants and the Dental Association of Malta and have compiled a set of measures that target all sectors of the economy. “We came together to pool our expertise and knowledge to produce a package of measures that will benefit everyone, and as a consequence, will benefit our sector.” She explained that the five associations represent 10,000 professionals and support staff. The proposals were submitted to the government, and a meeting is expected soon to discuss in further detail.
“We all depend on each other, so the proposals we made are broad and apply to everyone. Measures must be targeted along two streams, namely facilitating business operations through cost reductions, flexibility in working conditions, cash flow measures, and lending facilities, and on the other hand bolstering the liveability of employees through targeted measures to reduce their cost of living at this critical moment and to ensure that their needs are adequately catered for.” These proposals have also been presented to the government.
Turning to the issues faced by the construction sector, she said that contractors employ a large number of foreign workers, a number of whom are unable to work for a number of reasons, as some are in quarantine, or have been repatriated for instance. This, she said, has caused a slowdown as contractors are losing manpower.
Perit Pizzuto highlighted another problem… the supply of materials. “We are receiving reports that some quarries have shut down, and that some building material suppliers are closed, and so this adds to the problem. Some construction sites are reportedly shutting down due to the lack of materials.”
Indeed, Perit Pizzuto took note of yet another issue facing the construction industry. When a permit is approved, the next step would require preparing certain documentation for the Building Regulation Office, which includes condition reports on third party property (the properties neighbouring the site). “In these circumstances both the third parties and the periti would be exposed in terms of the virus spread. This is also impacting on the start dates of new projects, apart from issues related to investment by clients who are justifiably cautious at this moment in time.”
In terms of how their members are operating, the Chamber has issued a number of circulars which include suggested measures that should be taken in terms of possibly working from home, sanitizing offices, not organising non-essential meetings to take place face-to-face and others.
“We are also trying to address the issues our members face when going on construction sites. You can handle office work from home, but not site visits. We issued recommendations, such as that inspections should be carried out with only one contractor representative, and to ask contractors to declare that their employees are following the recommendations being made by the health authorities,” Perit Vella Lenicker said.
With all the above problems, the Chamber conducted two surveys, one last week and one this week, among its members in a bid to understand the trends and identify issues. While layoffs have been minimal thus far, layoffs will be inevitable if the trend continues, Vella Lenicker noted.
The architects were also asked about a potential lockdown situation, and they highlighted that if construction sites are left unattended for prolonged periods, this could pose an additional risk to the public. “We cannot have a prolonged situation where construction sites are left abandoned and exposed with no supervision, and remedial measures would need to be taken. A construction site is a living thing, and if there is a sudden prolonged stop to works, then measures would be needed to ensure that the sites remain safe also in view of simple things, such as the changing weather conditions,” Perit Vella Lenicker said. The Chamber is holding meetings with the public entities over such a possibility.
Indeed, in light of this potential scenario, the Chamber has also issued a circular recommending that its members carry out a preliminary risk assessment of open sites under their supervision, and that they identify the risks that may arise in the hypothetical scenario of a Government-imposed instantaneous lockdown of the construction industry. Such risks deal with risk of damage to adjacent properties. The Chamber recommended that all efforts are focussed on those works which pose a risk to the site and/or to adjacent parties during this current stage, in order to minimise such risks pending further notices from the government that could be made if they opt to call for a lockdown on the industry.