Study on the influence of COVID-19 on the growth of China’s small and medium-sized construction enterprises

Abstract

The outbreak of COVID-19 at the beginning of 2020 had a significant impact on China’s economy, society, and citizens; it also had a negative impact on the development of the construction industry. In particular, small and medium-sized construction enterprises with low ability to withstand risk have been strongly impacted, aggravating a crisis of survival among these firms. The focus of this study is to analyze the impact of COVID-19 on the growth of small and medium-sized construction companies. Based on the characteristics of small and medium-sized construction enterprises, this paper establishes a growth evaluation index and builds a growth evaluation model based on factor analysis. Twenty-three construction enterprises listed on small and medium-sized enterprises board are selected as samples, and the quarterly data of 2019 and 2020 are used for empirical analysis. The results show that the epidemic has had a high short-term impact on construction enterprises, and the total output value of the construction industry in the first quarter of 2020 was 16% lower than that in the same period of last year. In the long run, the impact of the epidemic on the growth of small and medium-sized construction enterprises has been limited. In the first quarter of 2020, the growth score of enterprises decreased by only 1.95% year-over-year, and it was essentially flat in the second and third quarters. The epidemic has had little influence on solvency, tangible resources or intangible resources but a high short term influence on profitability, capital expansion and market expectations. The long-term impact is small; It is conducive to the improvement of enterprise operation ability. Finally, to both address the influence of the COVID-19 on small and medium-sized construction enterprises and to realize their transformation and upgrading, targeted suggestions are offered at the policy and enterprise levels. The results will help to understand the impact of the epidemic on the growth of construction enterprises, and provide decision support for the healthy and orderly development of the follow-up construction industry.