Generally, projects currently underway are so long-term that we expect little immediate impact. Work on site is likely to slow as a substantial proportion of the workforce may be away ill and there may be shortages of building materials. Longer timelines mean that cashflow will be impacted.
The real hit is likely to be new enquiries and commissions. Clients are likely to pause or embargo new projects for an amount of time – how long depends on how long the covid-19 outbreak lasts. As clients’ own cashflow is likely to be impacted hard by the outbreak, funding for new or potential projects will be more uncertain. Early stage design work such as feasibility studies is more likely to proceed than Stage 2 or 3 work.
Because the covid-19 crisis will be expected to last for several months, this may bring about some unexpected changes of behaviour which, long-term, may impact the design or use of buildings.
The most obvious impact may arise out of the widespread use of home working. The advantage to employees would be to permit a more flexible working pattern, around childcare for example, while there may be cost-cutting advantages for employers. Were home working to continue long term this might have implications for office design and, indeed, the volume of office developments. this may be accompanied by a demand for re-configuring homes, to accommodate a more specific working space.
Here's how workloads might be impacted, sector by sector:
An immediate hit in the number of new enquiries and new commissions is likely as the housing market hits the pause button. In the medium term, Government is likely to provide a Keynsian boost to the economy by funding greater public housing and providing incentives for developer housing.
Client companies in this sector are likely to experience the first, massive hit as their income dries up and they urgently implement survival plans. Airports, sports stadia, theatres and other venues will lose their income. Some of these may have sufficient reserves to take the opportunity to refurbish while closed.
Likely to take a hit as developers and investors may have difficulty accessing funding this year. While there may be some opportunities for small scale refurbishment of existing spaces while they are empty, a substantial volume of work is likely to be put on hold.
This sector has been suffering for some years and for some, including household names, the covid-19 close down will be terminal. Food retail presents continued opportunities although their focus may be on maintaining supply chains rather than future developments.
We would expect an uptick in spending on schools, colleges and universities as a normal Keynsian response to the crisis, although universities may have taken a hit with their finances if they close.
Government has already announced a funding programme for 40 new hospitals, confirmed in the Budget, and it ilikely to be politically important for the Government to deliver this in the next four years. Other capital expenditure may be delayed if funds are diverted to essential spending on the covid-19 crisis. In the short-term, there will be some opportunities for work to convert and modify other buildings - offices or hotels - which are brought into emergency use as hospital wards.