Because of the increase in the COVID-19 cases across the globe, every sector imaginable has experienced at least one interruption in their day-to-day operations.
The Asia construction industry is no stranger to this predicament. In fact, infrastructure activities are among the top most noticeably affected by the pandemic as projects have been put on hold due to decreased manpower and supply disruptions.
Governments prioritizing immediate health concerns also affected the Asia construction activities, mainly because of the devotion of funds to the healthcare sector. But despite these short-term difficulties, one study revealed that the Asia construction industry is proving to be resilient in the face of the pandemic.
This comes as no surprise as the infrastructure activities in Asia, where the Asia construction market activities is enormous, have already resumed operations shortly after respective lockdowns have been lifted.
In China, for instance, local government bonds have partially helped construction firms bounce back from the pandemic shock, ultimately boosting the development of infrastructure construction in the country. Many countries are also starting to plan ahead for the new normal and are expected to ramp up the Asia construction activities to jumpstart the economy.
It has also been revealed that a majority of the engineering, procurement, and construction (EPC) contractors that participated in the study have recorded a revenue growth in the recent years. This revenue has served as a financial buffer for most of the contractors, putting these major EPCs in a relatively stable financial position despite the pandemic.
Having a healthy access to liquidity also significantly helped these construction firms stay on top of their game. With roughly USD3 billion bond issuances for the second quarter of 2020, EPCs will less likely face problems with liquidity in the near future.
Although these are all good indications of the status of the industry, there are still uncertainties brought about by the course of the pandemic and its impact on the economy.
Hopefully, Asia construction industry will bounce back sooner rather than later.
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