Effect of Coronavirus on Construction Industry

Effect of Coronavirus on Construction Industry

As we all know, Coronavirus has had a major impact on the construction industry and our day to day operations. It seems like there are new rules and findings daily. It may feel like a hassle for you to keep up with the rule changes as the knowledge about Coronavirus increases, but these daily changes like social distancing and wearing a mask could help keep you healthy, on the jobsite working, and could potentially save your life. You can read this article from The Daily Sentinel for some tips on how to navigate these challenges and what other companies are doing to remain functioning during the pandemic.

Another great website to visit about live updates on COVID-19 and its effect on the construction industry is Construction Dive. They give some great advice on best practices for responding to issues you are most likely currently facing. They are constantly updating this page with the newest information and articles regarding all topics such as How to Approach Contracts Post-Pandemic, Challenges With a Lack of Labor, How to Prepare for a Potential Second Wave of COVID-19, and many more.

One of the articles, Coronavirus Has Affected Construction the Most in These 10 States, notes the significant job loss that has come from this pandemic. In summary, they found that from March to April the industry had lost 975,000 jobs, or 13% of the workforce. In general, states that implemented the most severe government shutdown orders, experienced the largest losses. They stated, “New York state experienced the largest reduction of construction jobs from March to April, losing nearly 41% for a total of 166,200. California, a state with no statewide shutdown but many local restrictions including in the Bay Area, nearly made the top 10 list, reporting a 15.1% decline from last year’s construction employment numbers.” The top 10 most affected states are: Vermont, Michigan, New York, Pennsylvania, Massachusetts, Washington, New Jersey, Alaska, Connecticut, and West Virginia.

State construction employment in Colorado in April 2020 went down -6.5%, Texas was down at -5.0%, and Arizona stayed the same with no employment changes. In turn, this decrease in labor has caused many sites to cancel their new jobs. In fact, since the pandemic began in the U.S., an increasing number of contractors have reported that projects they expected to start in June or later have been cancelled. The numbers show as 16% cancellations in April and an increase to 24% in May.

We know that in this essential industry we are not able to complete our work remotely otherwise there would be no jobsite progress. However, some of the leading industries we rely on for our supplies are not in the same boat. The interruptions in supply chain could cause delays in our work but with no way for companies to recover on their loans due to their contracts and strict timelines. This is why Construction Dive has also recently released an article on Lenders Top Tips for Weathering the COVID-19 Crisis. In this article they discuss the Paycheck Protection Program, the importance of having a relationship with a lender you can trust, and a list of advice on how to navigate new legislation. Some words of advice include being picky about new jobs, being ready to explain how new safety and social distancing rules will affect a projects bottom line, paying off credit, and keeping your PPP funds in a separate account to name a few. You can read the full article to get all tips here.

If you have questions or want to contact us directly, email us at customerservice@sficompliance.com or call us at 800-727-5051.