COVID-19 and its impact on the Indian construction industry

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COVID-19 has negatively impacted the construction industry, which is evident in the performance of the capital market in the pandemic period vis-à-vis the pre-pandemic period. The basis for such conclusions is the cumulative abnormal returns in the period and the difference in the construction firms’ fair and market values. The underlying theoretical assumption of the Efficient Market Hypothesis (EMH) is at work. The study finds that investors have reacted quickly to various information concerning the pandemic, which has been reflected in the stock prices. The impact of COVID-19 has been felt across all industries. However, the construction industry has been more adversely impacted vis-à-vis other similar industries, thus necessitating a sector-specific revival package. A need for a cohesive action plan encompassing all stakeholders (government, industry bodies, workers) to curb the inconsistency in the application of legal provisions enshrined in the Real Estate (Regulation and Development) Act, 2016, and Building and Other Construction Workers (Regulation of Employment and Conditions of Services) Act, 1996, to smoothen the post-pandemic revival of the industry. An urgent need to adopt technology-based training methods and leverage offsite construction technologies.

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