Economic Closings

The economy has taken a major hit in almost every state. With the COVID-19 pandemic causing illness and death throughout the world, companies are making serious adjustments to the workflow. Employees are asked to stay at home, stores and business are closing for an indeterminant length of time, supply chains are disrupted, transportation is curtailed and, throughout it all, construction continues as an essential industry but at a slower pace than at any time in the past decade.
According to a survey of contractors done by the AGC (Associated General Contractors of America), 39% of contractors report that project owners have halted or canceled current construction projects. The association warned that these cancellations mean massive job losses soon. The relief AGC hope will be coming starts with Congress passing a major infrastructure bill, compensate firms for lost or delayed federally funded work, and provide needed pension relief. The project cancellations are particularly severe in light of new data showing that 42 states added construction jobs through February.
At the time of the survey, the week of March 23-27, only 18% of respondents had been ordered to halt work by elected officials. The sudden drop in demand is particularly harsh in contrast to the strong employment levels the industry was experiencing just a few weeks earlier.
Of the 1,640 respondents, 45% reported project delays or disruptions. Shortages of material, parts and equipment, including vital personal protective equipment for workers such as respirators, were reported by 23% of respondents while 18% reported shortages of craftworkers. Projects were delayed by shortages of government workers needed for inspections, permits and other actions reported 16%. In an effort to contain the spread of the coronavirus, 13% of jobs had delays or disruptions because a potentially infected person had visited a jobsite.
The survey also found that 35% of firms said suppliers had notified them or their subcontractors that some deliveries would be delayed or canceled. Only 22% reported similar supply chain challenges the previous week. However, 8% of firms did report they have added new work expanding healthcare and other facilities needed to respond to the growing health crisis.