Construction Dive recently reported on some of the Coronavirus related challenges construction companies will continue face heading into 2021. Even though 2020 is coming to a close, the spread of COVID has not, causing many industry experts to predict that many of the issues below will still affect contractors.
Here is their list of what we will be seeing in the next year:
- Labor Shortage-The industry is facing a historic shortage of skilled labor and many people refusing to return to work to their preference for unemployment benefits, concerns about catching the virus, and familial responsibilities.
- Shrinking Backlog-Contractors backlog of work has shrunk by 1.5 months compared to this time last year and the readings for sales and profit margins has also decreased.
- Falling Construction Costs-Construction Dive stated that, “A variety of pandemic-related forces have caused construction costs to decline slightly for the first time in a decade, which could lead contractors to feel a pinch in profits.”
- Less Work-With more people working from home, some companies are considering cutting out their overhead costs and working from home full time. This is causing a grey area for the construction of office buildings. Other construction that could take a hit include healthcare facilities, nursing homes, travel and hospitality sectors, and sports and performance venues.
- Price increases-Material shortages, on lumber especially, have caused us to see significant price increases on construction products since May. Experts are predicting prices will continue to increase as the demand for these products increase.
- Supply Chain Issues-As production returns to normal levels, the strain on supply chains increases and determining how to get materials and equipment delivered remains.
- Diminished State and Local Government Revenues-State agencies will have less money to fund infrastructures like roads, bridges, and transit projects.
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