Special Report Looks at Construction Industry to Gauge Impacts of Response to COVID-19 Pandemic

Construction.

According to a new special report from Dodge Data & Analytics, Hamilton, N.J., the construction industry stands in a unique position when gauging the impacts of the response to the COVID-19 pandemic. The special report combines information from Dodge’s two construction-related reports, the Commercial Construction Index and the Civil Quarterly. These reports include examinations of business conditions in the industry, including backlog, revenue and profit margin expectations, workforce issues and supply chain issues.

Largely declared an essential industry, many construction projects were not shut down, even in the early months of the pandemic. Despite this, public funding on which infrastructure projects rely and the general economic health of the nation both threaten to significantly slow down the market.

For commercial and institutional construction contractors, while business decreased sharply from Q1 of 2020 to Q2 and contractor confidence in their ability to market and supply work over the next 12 months dropped significantly, one score, the average current to ideal backlog, fell only slightly. However, by Q3, the ratio of current to ideal backlog continued to fall, while new business confidence and revenue expectations began to pick up.

“With the pandemic ongoing and uncertainty about a resurgence in the fall, contractors in the July survey nonetheless were slightly more optimistic about their business prospects than those in April,” the report stated.

This and related data demonstrate that commercial contractors have been experiencing serious business impacts, but their optimism is already rising for stronger market conditions in the future.

For heavy civil construction contractors, most of them continue to have backlog levels close to their ideal amounts, even after the impacts of the pandemic have been felt for several months, largely because the projects on which they are working this year had already been funded prior to 2020.

The future may look different, though. According to the report, as public coffers are diminished by increased spending in response to COVID-19 and declining tax revenues, future projects outside of the six-­ to twelve-month outlook may be at risk.

The report also looks at how contractors are changing the ways they do business in response to the pandemic. Some of these changes include including allowing remote work options for some office employees, having to lay off some employees and adapting technology to support social distancing.

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