by Brianna Crandall — March 27, 2020 — As the COVID-19 coronavirus pandemic continues to shut down businesses across the world, the heretofore-booming construction industry is in a state of flux, with some localities ordering a temporary halt to projects and others allowing work to continue, as well as challenges in the areas of worker safety, personnel availability, government oversight, material shortages and more.
March 20 coronavirus impact survey
The coronavirus pandemic has caused more than one out of four contractors to halt or delay work on current projects, according to a survey released March 20 by the Associated General Contractors of America (AGC), The Contstruction Association. The survey results show how quickly market conditions have changed compared to data showing a majority of metro areas added construction jobs through January. Association officials noted that a relief bill the Senate is considering includes some favorable tax and loan provisions. But they said the bill also needs new infrastructure investments and improvements to the new paid sick and family medical leave measures.
According to Ken Simonson, the association’s chief economist:
The coronavirus pandemic has the potential to undermine what had been a very robust construction market, threatening the livelihood of countless workers and the viability of many firms. Providing additional tax credits and loans will help, but contractors also need the certainty that comes with infrastructure funding and improvements to the new paid and family leave measures.
In an online survey conducted by the association between March 17 and 19, 28% of the 909 respondents replied “yes” to the question, “Has any owner, government agency or official directed you to halt or delay work on any projects that are either active or expected to start within the next 30 days?” In addition, 22% of respondents said a supplier had notified them that deliveries would be late or canceled.
Contractors listed numerous types of delays and shortages:
- Nearly one out of five (18%) cited shortages of required government actions or personnel, for instance to issue permits or certificates of occupancy, conduct inspections or lettings, or make project awards.
- 16% noted a shortage of materials, parts or equipment, including workers’ personal protective equipment such as respirators.
- 11% reported a shortage of craft workers as individuals self-quarantine or stay home to care for others.
Comparison with the previous year
Underscoring how rapidly market conditions have changed, the association also released data on construction employment changes between January 2019 and January 2020 in 358 metro areas that showed how strong the market was two months ago. A majority — 200 areas (56%) — added construction jobs, while 95 areas lost jobs, and 63 metros had no change. Houston-The Woodlands-Sugar Land, Texas added the most construction jobs from January 2019 to January 2020 (12,400 jobs, 5%). The largest construction job decline occurred in Baton Rouge, La. (-6,500 jobs, -12%).
Senate relief measure
Association officials said the newly released Senate relief measure does too little to help the increasingly hard-hit construction industry. They noted that the tax and loan provisions in the measure will help offset declining demand. However, they urged Senate leaders to include new funding for infrastructure projects and to protect the retirements and health care of construction workers in multiemployer plans. They also called for additional fixes to measures enacted earlier this week that force employers to front the cost of newly mandated paid family and sick leave measures.
Stephen E. Sandherr, the association’s chief executive officer, stated:
The Senate proposal offers a good start to helping offset the sudden drop-off in work many contractors are experiencing. But without real investments in new infrastructure, compensation for contractors’ lost work and up-front funding for paid sick and family medical leave, it does too little to help the industry and its nearly eight million employees.
AGC and union officials have urged government officials to exempt construction work from regional, state and local work shutdowns, citing measures that have been taken to ensure worker safety and the vital importance of the construction industry to the country’s infrastructure, including recovery efforts in regions hit by natural disasters and efforts to expand hospital capacity
Among the resources AGC is making available to the construction industry is Navigating the Outbreak, an eight-part webinar series on the factors that construction companies need to consider as they strive for business continuity. The series runs Monday, March 23 to Wednesday, April 1, from 2:00 PM – 3:30 PM EDT; Member Price: FREE; Non Member Price: $599 bundle:
- Part I: Your Federal and State Legal Obligations to Provide Paid and/or Unpaid Leave to Your Employees
- Part II: What the Federal and Many State Labor and Employment Laws Are Likely to Require of You, as You Adjust Your Operations to Meet the Latest Contingencies?
- Part III: The Contractual and Related Legal Protections and Risks for Construction Companies
- Part IV: How to Protect Your People and Your Projects
- Part V: The Components of a Comprehensive Project Continuity Plan
- Part VI: Insurance Coverage and Claims for Losses Resulting from the Outbreak
- Part VII: The Additional Pressure that the Outbreak Could be Putting on Your Information Technology
- Part VIII: What You Need to Watch, as the Outbreak Continues to Unfold
For more details and registration for the Navigating the Outbreak series, see online.
AGC also maintains a Coronavirus (COVID-19) webpage with information and general guidance about COVID-19, project shutdown notices, COVID-19 surveys, webinars, a long list of coronavirus resources, and frequent related news updates.