THE CONSTRUCTION SECTOR IN COVID'S TIME

Overview 2020-2021

The year 2020 has undoubtedly been an extremely complicated year for the construction industry in Mexico, not only because of political austerity in terms of budget reductions for public works, but also because of the profound economic impact brought about by the extended period of the pandemic caused by COVID-19 and the preventive measures adopted by the Federal Government.

Starting from an unfavorable scenario in 2019 where a 5% decline in the GDP of the construction industry was recorded at the end of the year according to figures from the National Institute of Statistics and Geography (INEGI), it is estimated that as of December 21, 2020 there will be an additional 17.4% decline in the construction sector, which would result in an increase in job losses and the closure of companies related to the business, the outlook is somewhat discouraging when compared to the projected annual growth of 4.5% that was expected.

Although construction companies end the current year and begin 2021 with a less difficult scenario, they are also forced to change their operating dynamics in order to comply with the sanitary measures imposed by the government to safeguard the integrity of their workers. These measures have a strong impact on the social dynamics of the workers and on the day-to-day operation of the companies, as there is a climate of instability in the face of possible total or partial closures due to the increase in contagions and, consequently, possible reduction of workforces, creating an atmosphere of uncertainty that not only affects builders but also has an indirect impact on the investments of individuals and other industries that are part of the production chain.

OVID-19 has become public enemy No. 1 worldwide, bringing with it economic recession, instability in the financial markets, exchange rate variability and increased interest rates, but above all risk aversion on the part of investors. However, it is not all bad news, since from the beginning of the third quarter of 2020 there will be an important stabilization in private investment, which will allow the recovery of a certain percentage of jobs and the gradual economic reactivation.

Part of this economic reactivation depends essentially on the construction companies. Suntak Project Management decided to take early preventive measures to safeguard the integrity of its workers, suppliers and collaborators, abiding by the hygiene measures stipulated in the official communiqués of the Mexican Social Security Institute, establishing the following safety measures:

1. Sanitary control modules in offices and in the field, as well as strict hygiene measures.
2. Implementation of health protocols and prevention courses for its employees.
3. Daily monitoring of temperature and possible symptoms to staff and visitors. As well as the respective follow-up of suspected cases.
4. Mandatory social distancing, home office and prevention for workers in vulnerable conditions.

With all of this, we seek to safeguard the integrity of our employees and collaborators. For its part, the federal government is in a state of alert, due to the fact that the epidemiological indicators and traffic light are mostly in the red, with an increase in the number of cases of contagion and deaths.

As of December 18, 2020, the following figures have been recorded:

•  Contagion: 77,721

• Deaths: 4,926

It is the third state with the highest number of infections, surpassed only by CDMX and the State of Mexico. 

Even so, there are high expectations for the economic reactivation, hoping that the hygiene measures, sanitary protocols, the application of vaccines and above all the awareness of the population before the safety and hygiene measures will help the early economic recovery, projecting that by the beginning of the third quarter of 2021 the economy of Mexico and especially the construction sector will normalize and even have positive trends with respect to 2020.