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Global Vantage: Comparing Government support for construction businesses during the Coronavirus

April 2020
Antony Smith

Construction is expected to be one of the industries hit hardest by the coronavirus outbreak. With working from home simply not an option for many in the sector, some businesses are struggling to cope as ‘lockdown’ measures see work on sites grind to a halt.

In response, Governments around the globe have rushed to introduce initiatives to ease the threat that the coronavirus poses to both the physical and economic health of individuals and businesses in the industry.

To help ensure the safety of essential workers who continue to travel to sites around the country, the Government in the United Kingdom has worked together with industry leaders to develop Site Operating Procedures (“SOP”), specifically designed to respond to the risks of the Coronavirus. In addition, and amongst other things, employers required to cease work can take advantage of a “furlough” scheme, which will see the Government provide employers with cash grants equating to 80% of an employees’ wages.

In the Republic of Ireland, where housebuilding and work on projects has collapsed to its lowest levels in 11 years, Taoiseach Leo Varadkar has introduced several income support measures designed to help those who have seen their employment impacted by the coronavirus. This includes the Temporary Wage Subsidy Scheme, which, similarly to the “furlough” scheme in the UK, is designed to assist employers in paying employees during the crisis.

Amongst the economic relief measures introduced in Dubai, the UAE Central Bank has announced that it will require banks to be more lenient with payments due from clients. Given the prevalence of payment delays in the construction sector, such measures should be welcomed with open arms.

In the US, construction companies have been the largest beneficiaries of the Federal Government’s $349bn Paycheck Protection Programme (“PPP”). Delivered through the Small Business Administration (“SBA”), the PPP is aimed at helping businesses keep their workforce in employment during the pandemic. As of 13 April 2020, the SBA reported that it had approved nearly $34bn PPP loans to businesses in the construction industry.

A healthy construction sector is critical to the success of any economy. We welcome the introduction of legislative measures aimed at supporting the sustainability of the construction sector, and urge businesses to continually monitor and take advantage of Government assistance where possible.

For further information on anything covered in this publication, please contact Antony Smith.

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