Response Strategies of UK Construction Contractors to COVID-19 in the Consideration of New Projects

Abstract

COVID-19 presented a catastrophic event, creating a unique environment and resulting in lasting repercussions globally. The construction industry has been one of the worst affected sectors relating to the public health pandemic. Challenges such as workplace closures and site cessations led to untold uncertainty, developing into contractual grievances and supply-chain disruption, amongst others. The focus of this study is to determine the response strategies of UK construction companies in the face of the COVID-19 global pandemic and the subsequent recession the UK fell into as a direct result. A literature review of previous recession responses was examined and four areas for further consideration were identified, which included contracting, risk management, cost control and finance. The study compared the previous response strategies to identify whether lessons had been learned from prior experience, or if new strategies had emerged due to the different economic and political circumstances. A qualitative methodology was adopted to provide the required depth of analysis for the research. Thirty-two participants from different size construction organisations were interviewed, which provided evidence of strategies across the four categories analysed. The results indicated that in the early stages, uncertainty around all aspects of the pandemic caused organisations to anticipate the worst financial consequences, as the scale or scope of government intervention was initially unknown. As a result, companies reacted by downsizing, halting expansion, introducing competitive pricing to ensure there were projects in the pipeline and diversification to ensure stability and survival of the company. Organisations used the pandemic as an opportunity to restructure and invested in new technology to remain competitive. Client relationships and supply-chain partnerships were deemed to be of upmost importance in resolving contracting challenges that the pandemic brought about.