The decision to reinstate lockdown is very much on the table for several major cities and nations as the threat of a second outbreak of the novel coronavirus looms over their heads.Melbourne of Australia and some other places have already enforced lockdown again to protect their citizens as Covid-19 cases spiked recently.Bangladesh has been experimenting with zonal lockdowns to curb the ongoing spread of the coronavirus for a while now. Before that, a two-month period of unofficial nation-wide lockdown was in effect.The entire nation and all activities came to a halt during the initial lockdown period but has since resumed, albeit, in a limited capacity — except for the complete lockdown areas. Now, if indeed a second nationwide lockdown comes into effect, there will be very few more badly affected than the construction and real estate sector and those in it.
During a second lockdown, the worse off would, undoubtedly, be the labourers in the sector.Around 3.5 million people, if not more, are employed in the construction and the real estate sector as workers — many of whom are teetering on the poverty line at best and may end up jobless. During the initial lockdown period, labourers were forced out of work and thrust into joblessness and poverty as opportunities to work dried up. According to the president of Bangladesh Construction Manufacturers Association, 2.5 million workers have already lost their jobs and the future of every worker in these sectors is in jeopardy.
The resumption of some activity in the construction sector has not been much to be cheerful about as well. The lengthy lockdown period has had a devastating effect on those that relied on daily wages and we have seen/are seeing a mass exodus of people returning to their villages — unable to sustain the city life due to costs. As a result, construction sites are having difficulty finding ample skilled workers for their projects.Surprisingly, even though there is a shortage of construction workers in cities at the moment, many of them complain that they are having to settle for less pay for work — sometimes Tk100 to Tk200 less than the usual as there is a lack of construction work at the moment and the workers feel desperately despondent.
From a business perspective, this is uncharted territory. There has never been a moment in Bangladesh’s still short history when almost all construction activity stood still until the initial lockdown period. For many people who have worked in the construction sector for decades, this is the first time they are witnessing a lack of construction work. The on-again, off-again lockdown situation and the indecisiveness of the authorities are perplexing the sector regarding if and how they should move forward.Even now, around 50% to 60% of real estate projects are stalled, as per REHAB, along with many infrastructural projects. All the while, prolonged lockdown period and scarcity of labour, equipment and material is increasing the overhead cost of projects daily.
This cocktail of unfavourable circumstances has pushed the construction industry to uncertainty. Safety measures are preventing access to several project sites and delaying completion and handover to clients. The financial blow to these businesses may take years to recover from while recovery may very well be impossible for some altogether. A second stretch of full-fledged lockdown, if imposed, can be merciless for the industry if no support from the government is provided beforehand. With each passing day of this horrendous situation, the capacity of the sector to create and provide housing is decreasing — and because of that, the economy is suffering.
According to the latest report by the research director of the Bangladesh Institute of Development Studies, it is estimated that the overall poverty of Bangladesh may increase by 25.13% under an optimistic post-lockdown scenario.Furthermore, second lockdown, a hard one this time, would add even more scores of new poor to the economy. And by the year’s end, we will see around 16.4 million people become newly poor. However, another thing that needs to be considered is the number of people who will see their income decrease under such a scenario, just as it did during the first lockdown period — the severity of the economic impact of which is still uncalculated.
Under the circumstances, if the construction sector continues to feel the brunt of blow, brought on bya renewed lockdown period, it would only amplify the economic woes of the country. Livelihood of people and even the economy would be at stake. Decisiveness and support, regardless of whether another lockdown is enforced or not, would be the right path to recovery during these challenging times. The severity of the construction industry’s anguish is still rising — as is uncertainty. And like all oh so many places, another lockdown just might be on the horizon for Bangladesh and its economy.