Ongoing Effects of COVID-19 on Construction
Economists have been saying that the New Zealand economy has seemed too good to be true for a while now. But things have changed. With the outbreak of COVID-19, there’s a strong chance that all business sectors, including construction may soon plunge into recession. Some countries such as America are already reporting this. In their fifth month now, many U.S. cities are reporting a second wave of the virus and new cases are reaching all-time highs. Businesses that were trying to reopen are now reconsidering the risks.
Speaking of risks, construction has always been a risky game with higher levels of insolvency. However, most construction projects have attempted to keep moving forward in spite of covid-19 in New Zealand. Many NZ economists are warning that the dangers of recession will be strong during the next three to six months.
Since most nations of the world depend on each other these days to keep their economy strong, even if New Zealand makes a full recovery, it could still suffer. As nations of the world still struggle with the long-term effects of their virus on their very way of life, New Zealand’s economy will most definitely be influenced to some degree.
In the construction industry, contracts are signed between parties before the work is begun and they’re signed in good faith. It’s difficult to foresee events such as earthquakes and deadly viruses though.
In order to mediate the potential damages, many business people are turning to bonds, retentions and credit insurance to protect their assets. This is a sound solution that offers peace of mind to the business owner and keeps projects moving forward.
These are uncertain times we’re living in. America, one of the largest nations in the world, has tripled its national debt in the last six months as it grapples to deal with the coronavirus. Millions are out of work. Their poor economic health is certain to affect that of other nations around the world and all most of us can do is prepare.
According to the Restructuring, Insolvency & Turnaround Association’s website:
“The Government has implemented a number of supports aimed at helping businesses remain viable and keep people in jobs. One of these initiatives is Business Debt Hibernation as part of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (the Act), which received Royal Assent 15 May 2020.”
Though the government is working on behalf of New Zealand businesses, it’s up to each one of us to make sure to take the proper steps to remain profitable and solvent during this ongoing crisis.
In today’s uncertain world, it’s important to have protection for construction projects and insurance for business resilience. Applying for contract surety bonds can be time-consuming. At Bonded NZ Ltd, we offer preparation and guidance to help contractors provide timely, quality information and maximise their surety bond credit.
Professional Indemnity Insurance is another good solution. This is designed to protect both your assets and your reputation in case of inadvertent negligent acts. This a great option for businesses that provide opinions, advice, design or specifications.
A Builders Warranty offers peace of mind to those in the construction industry. As we all know, unforeseen delays and other events can occur that put projects behind.