Assessing the COVID-19 Impact of Projects under Construction with Monte Carlo Simulation

The outbreak of the novel coronavirus pneumonia (COVID-19) in 2019 and the 2022 war in Ukraine have had profound global impacts on travel and logistics, disrupted the material supply chain, significantly influenced the cost and progress of construction projects, and further impacted the operational effectiveness of firms. Despite some existing studies providing valuable insights into the impact of COVID-19 on the construction industry, there remain research gaps that need to be addressed. Prior studies have mainly focused on the immediate impact factors of the pandemic, such as supply chain disruptions and workforce shortages, and strategies for effectively reducing or eliminating these risks. However, there is a need for research that delves into the long-term implications of these disruptions. So far, no relevant research has quantified the broader impact of the epidemic. Thus, this study aims to analyze the effects of the pandemic and the war on 136 construction industry professionals, their projects, and firms through literature review, questionnaire surveys, and expert interviews. The study compiles a list of significant risk factors for construction projects between 2019–2022, including their probability of occurrence, impact over time, and overall cost. The study also analyzes and discusses the impact of these high-risk factors as of 2022. To quantify the impact, cost, and level of exposure to these risks suffered by actual construction projects over this period, the Monte Carlo simulation method is introduced. This approach provides contractors with early prediction of risks and appropriate responses to mitigate risks.