Construction Projects at Risk Amidst Coronavirus

construction

A new survey published by the Associated General Contractors of America (AGC) finds COVID-19 is causing significant problems for the construction industry, with 39% of contractors reporting project owners have halted or canceled current construction projects amid deteriorating economic conditions. The project cancellations are particularly severe in light of new data showing 42 states added construction jobs through February.

Conducted between March 17 and 19, the survey received 1,640 responses and found:

  • 45% of respondents reported experiencing project delays or disruptions.
  • 23% of respondents reported shortages of materials, parts and equipment, including vital personal protective equipment such as respirators for workers.
  • 18% reported shortages of craftworkers.
  • 16% said projects were delayed by shortages of government workers needed for inspections, permits and other actions.
  • 13% said that delays or disruptions had occurred because potentially infected people had visited jobsites.
  • 35% of firms said suppliers had notified them or their subcontractors that some deliveries would be delayed or canceled. The previous week, that number was only 22%.
  • Only 18% of respondents reported they had been ordered to halt work by elected officials.

“The abrupt plunge in economic activity is taking a swift and severe toll on construction,” said Ken Simonson, AGC’s chief economist. “The sudden drop in demand stands in sharp contrast to the strong employment levels this industry was experiencing just a few weeks ago.”

AGC officials warned that project cancellations and delays mean massive job losses are likely soon unless Congress passes targeted recovery measures to boost infrastructure funding, compensate firms for lost or delayed federally funded work and provide needed pension relief.

“The steps firms are taking to protect workers from the coronavirus unfortunately won’t be enough to save many of them from the economic damage the pandemic is creating,” said Stephen E. Sandherr, AGC’s CEO. “Construction workers and employers need more than a lifeline. They need a recovery plan.”

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