How the Pandemic Hurt/Helped the Construction Industry

Construction siteWhen it comes to the Covid-19 pandemic, it seems like it has mostly been a lot of bad news. But for the construction industry there really has been a mix of the bad and the good. The measure employed by Dodge Analytics to gauge the health of the construction industry dropped by over 25% between the first and second quarters of 2020, but by the third quarter that number remained steady and even rose slightly thus suggesting that initial negative impacts of the virus had leveled as the year wore on.

Negative Impacts

The extent of negative impacts on the industry have largely depended on the type of project and location. Infrastructure projects, for example, have weathered the pandemic better because of pre-approved funding. Across the board, however, business has been negatively impacted. Associated General Contractors of America reported that 40% of construction firms across the U.S. had to lay off workers because of Covid-19. Some of the areas in which the industry has seen detrimental effects are:

  • Supply chain delays created by restrictions on transborder movement as well as disruptions for transport companies due to illness and Covid regulations
  • Lost labor either from illness or the need to lay off workers because of inability to pay or provide projects.
  • Contract and insurance problems caused by companies coping with heretofore unanticipated delays, cancellations, illness, and injury due to the pandemic.
  • Struggles to comply with changing OSHA Regulations concerning Covid, such as the use of PPE, social distancing, and sanitization.
  • Coming to terms with a digital environment where those who can have worked remotely. This has raised not only logistical issues, but also costly issues of cybersecurity.

Positive Impacts

Not all news has been bad though, and the construction industry has proven to be surprisingly resilient over the course of the pandemic. A year into the covid-crisis, property values have defied expectations that they would drop during the recession caused by consumer panic and have actually increased. This has meant continued investment in and work for the construction industry. By mid-year of 2020, project delays had fallen to just 26% from the earlier 40% mark shown in April of that year. Other ways in which the industry has been helped by the pandemic include:

  • Governmental response to the crisis has created stability for the property market, making safe investor havens where money can be converted to jobs.
  • President Biden’s infrastructure plan has allocated $1.3 dollars to projects that will benefit the construction industry.
  • Government is offering credits and incentives meant to drive construction projects, particularly in green development, from which contractors can benefit.
  • Adjustments in recognition of burdens placed on the lowest level of workers has caused shifts in cost carrying so that subcontractors don’t shoulder the weight of that burden.
  • More attention is being paid to risk assessment so that contractors are working more with clients where contracts more accurately assess and reflect the nature of risks.
  • Companies have solved supply issues by turning toward more local sourcing which not only solves chain issues but also benefits the communities in which companies work.

Ivan Young is a writer from Happy Writers, Co. in partnership with, one of the leading stethoscope distributors.

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