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Cancellations, staffing issues and supply delays beleaguer construction industry

Cancellations, staffing issues and supply delays beleaguer construction industry

A new survey by the Associated General Contractors of America along with data from Procore, a construction technology firm, found a mixed bag of results in the answers collected from more than 600 construction companies around the country. For some, the effects of the COVID-19 pandemic are a memory fading into the distance, but for others, there is no end in sight.

“Many of the immediate economic impacts of the coronavirus have passed and, as a result, activity and hiring are up, a bit,” said Ken Simonson, the association’s chief economist.  “But while the immediate crisis appears to have passed, we are just now beginning to appreciate some of the longer-term impacts of the pandemic on the industry.”

On the bright side, 26 percent of the firms replying said they are working at pre-pandemic levels, and in some cases, even working beyond them. Also, 20 percent say they have a higher staff headcount now than they did before the coronavirus wreaked havoc on the construction industry, and 41 percent say they have the same number of staff as pre-coronavirus.  

But many construction contractors say the negative effects of the pandemic continue. After industries around the world shut down for weeks and in some cases months, there is a serious shortage of construction materials, equipment or parts in the marketplace. Twenty-five percent of respondents say that shortage is forcing project delays for crews that are ready to get back to work. On the whole, almost 40 percent of construction firms say their suppliers have canceled orders or significantly extend delivery dates. Also concerning is the number of projects that are still being halted and canceled will into the future. Nearly 20 percent say they’ve had projects scheduled to start after August 1 canceled.

Also hindering the industry is the federal unemployment supplement, firms say, because furloughed workers are reluctant to return to work before the supplement ends at the end of July. Construction contractors say they are against any suggestion that the supplement may be extended beyond its original deadline.

Most believe it will take time for the industry to fully recover, the survey suggests, with 42 percent saying it will take at least four months. Thirty percent think it will take six months or longer, and 83 percent of the firms that replied are hoping the federal government will step in with programs to help them.

See the report and read more about it HERE.