Covid-19 has led to an increase in the cost of construction, according to the Construction Cost Guidebook India published by JLL.
According to the report, the cost of construction of greenfield and interior fit-out projects have gone up by 5-6% due to covid-19. The pandemic led to a halt in construction activities and abrupt closure of certain construction sites and interruption in supply chains.
The rise in cost can be attributed to the procurement challenges faced by the vendors as they may have to procure from the first available source at a higher price. Also, the increased cost towards health and safety (setting up of quarantine facility, sanitation, thermal scanners and like), and skilled labour availability may have attributed to the increase in the cost of construction. Material and transportation costs have also spiked due to demand and non-availability and transportation challenges.
Once the supply chain reinstates, the prices shall return to normal, says the report.The report also analyses the cost of construction across major cities. The cost of construction is the highest in Mumbai city.