Construction Industry plays an important role in the economic development of the country. The construction industry also has potential for generating employment in other sectors of economy such as manufacturing, transport, commerce and financial services. Erection of any real estate or infrastructure is done by sections under the Construction Industry. The scope of the Construction Industry is excessively broad, and mirage industrial group is making its essential commitment to growing it further.

Let’s understand about Industrial Contractors and their importance.

Who is an Industrial Contractor?

There are three types of construction in general:

  • Building Constructions
  • Infrastructure Constructions
  • Industrial Constructions.

Industrial construction deals with construction of factories, power plants, warehouses and other specialized facilities. Designing, installing and maintaining structural and mechanical components in these facilities require expert, trained and highly experience workers who can multitask. Experienced management of construction is the key for efficiency that can save a company budget.

Industrial contractor looks after several construction jobs right from building structures to repairing and demolishing. He also supervises the work of sub contractors and workers involved in the project. The contractor is required to get the licenses and is responsible for completion of project within the estimated budget and time.

With the huge size of most modern works choosing a temporary worker or individual worker can be troublesome. To overcome this choosing an Industrial contractor is more valuable and risk free.

The duties of contractor include:

  •  Schedule monitoring
  •  Property security
  •  On-site personnel management
  •  Site engineering
  •  Building permits application
  •  On-site facilities

In general terms industrial contractors is responsible for planning of the entire project, managing, executing, inspecting, surveying labor safety and financing. Thus he must utilize the best methods for completing the project as specified.

Industrial Construction is a very specialized, niche construction vertical.

In many ways, an Industrial construction project is similar to a residential or commercial project.​ A team of specialists divide the work amongst themselves and the entire project is handled by an individual contractor or firm.​ However, there are differences in specialized skills and abilities.

Another distinction is the presence of governmental involvement in industrial projects. 

Because of the nature and extent of a mechanical form, government oversees certain work such as

fire regulations, sewer/water guidelines, and any dangers to land or environmental. 

Due to the global pandemic there seems to be crisis and the construction industry is facing a number of issues.

So what are the significant issues the construction industry is facing in 2020?

  • Labors are not paid on time.
  • Unfavorable contract terms
  • Safety of the labors
  • Delay in ongoing projects
  • Increase in cost of raw materials

Let’s get a detailed overview of all the above issues.

  • Labors are not paid on time

Finance is one of the significant issues confronting the development business in 2020. It is utmost important for a company to have a regular and positive cash in-flow which enables to meet a lot of demands and also promises a secured livelihood to workers and their families. But the current scenario has led to major stagnancy of cash-inflow, because of which the sub contractors are not paid on time. Since the sub-contractors are responsible for payments to suppliers and workers, it increases there liability and this has given rise to the subcontractors filing claims against their general contractors and owners in several major projects.

  • Unfavorable contract terms

A lot of financial risk is involved in construction projects. As the work is handled by different agencies, sub contractors are most affected and have to face a large amount of risk. Many a times the subcontractors enter into contracts with unfavorable terms such as bearing expenses for on-site damages, significant effect, promising guarantee/warranty for a considerable time period and so on. A sub contractor should carefully study the clauses included such as payment and installment terms, guarantees, lien waivers, and change orders. If in any case the deadline is missed it will heavily affect their wallet.

However, numerous subcontractors experience delay in completion for no fault of their own and postponement is largely due to unforeseen condition or natural calamities. Delays or disruption arising due to long time spent in documentation tracking or schedule changes are insured against liquidated damages.

  • Safety of the labors

Construction work is obviously very dangerous, thus looking after the safety of the workers involved is always a priority. A large amount has to be spent on workers insurance and compensation for injuries and accidental deaths. This adds to the construction expenditure.  71% of labors in webinar online class informed that they had encountered accidents or injury in the last 12 months.

Unsafe practices, Low-cost maintenance, Poor materials, and lack of safety parameters are common issues that put labor safety in danger. Negligence on part of construction companies on safety issues results in strict punishments.

  • Delay in ongoing projects

There are numerous reasons which hinder the on-time completion of project the major being unanticipated conditions on work place, change in work pattern, and amendments in the core design work and lot more. 

Just 25% of projects are surprisingly completed near to deadlines. Subcontractors face delays to incorporate changes in design, work pattern and scope.

Task delays are a top issue in the development business in 2020 because the development work had come to a standstill during COVID-19 as social distancing and urge to remain at home had become utmost important to control the pandemic.

  • Increase in cost of raw materials

Nonresidential construction prices rose by 2.5% in June, according to an Associated Builders

and Contractors analysis of U.S. Bureau of Labour Statistic’s Producer Price Index​

data. This follows a rise in prices of 0.8%.

Industrial construction companies face a huge hike in the cost of raw materilas. Base cost of construction materials like aluminum, steel, and timber saw a rise because of newly imposed tariffs. These can raise the general development cost and extend the net revenues for contractors.

With this, it may be a smart decision to change provisions or add terms in your agreements to consider space for changes in material expenses.

Till now a large quantity of construction material was imported from China, but due to COVID-19, there may be a temporary stop in the export of these products. In this manner, these disturbances can affect the cost of materials.

It is crucial to track changes in contracts carefully and to ensure that everything is recorded on paper and all terms are agreed by everyone along with their initials. Careless activities can cause huge expenses and delay in completion of the project.

The Bottom Line

The commercial construction industry will have to overcome several problems in the near future. Leading Industrial Contractors like Mirage Industrial Group ​are in a best position to understand what​ challenges are there and are prepared to face them positively. One should choose the construction company keeping in mind all the points mentioned above and discuss how they should deal with the above issues with the construction firm.

The market is uncertain in this pandemic; hence choosing the right company is of utmost necessity. That will keep your invested money safe. As a specialty contractor in heavy civil, mechanical and structural steel, customers rely on Mirage’s meticulously maintained equipment, proven project management procedures, and sound financial resources for excellent results.