Construction Executive: Majority of Contractors Fear Long-Term Implications of COVID-19 on Their Businesses, Survey Says

In order to gauge contractors’ experiences and market predictions as the pandemic lasts through the remainder of 2020, Construction Executive conducted a survey of 263 contractors across the United States in late August. The results of that survey reveal that most contractors have been negatively impacted by COVID-19 in some fashion, and they expect to see the trend continue into 2021.

More than 85% of the contractors surveyed reported that they are currently experiencing project postponements or cancellations due to COVID-19. Supply chain disruptions, prolonged municipal permitting processes and delayed inspections due to office closures are all factors contributing to the increased rate of postponement and/or cancellation.

While many contractors have not yet seen drastic impacts to their business, as construction was in many areas considered an “essential” service, it is the long-term implications that seem to be most concerning. 70.3% of contractors do not expect the construction industry to stabilize until at least 2021, while an additional 10.4% say they believe it may never reach pre-pandemic levels.

Of the projects continuing to move forward, contractors ranked the following market sectors in order of highest to lowest viability:

– Health Care (19.74%)
– Government (15.34%)
– Multifamily (14.77%)
-Heavy/Highway (13.64%)
– Manufacturing (12.93%)
– Educational (11.36%)
– Retail/Mixed Use (4.55%)
– Offices (4.12%)
– Institutional (Museums, Visitors Centers) (1.99%)
– None of the above (1.56%)

Interestingly, an overwhelming 74.5% of contractors also shared that sales of newly built single-family residential homes are trending upward. 47.83% also reported an increase in new condominium sales.

Given the “new normal of social distancing,” with the CDC recommendations to maintain a distance of at least six feet between people, one might expect that office renovation projects would see an uptick. However, more than three-quarters of respondents (76.12%) stated that they have not found this to be the case. Concerns over indoor air quality and proper ventilation may have also led people to believe there would be a large increase in HVAC upgrade projects, but only 31.79% of respondents stated that this was the case.

When asked to share their top concerns over risks posed by the virus, the largest percentage (15.25%) of contractors said health fears about the virus itself were of utmost importance. Changing project timelines (13.19%), supply chain disruptions (11.7%) and shortage of available workers (10.44%) were also high on the list. Very few reported difficulty paying invoices (2.29%) or adoption of new technologies (4.7%) as major roadblocks in mitigating impacts of the pandemic.

The construction industry is historically known for being slow to adapt to change, particularly when it comes to implementing technology. A majority of contractors (69.15%), however, believe that the industry will see much more widespread adoption of technology post-COVID-19. A remote workforce and the need to optimize productivity levels are major drivers of this shift to a more tech-savvy construction industry.

Following the pandemic-induced recession, just over three-quarters of contractors (75.12%) believe that there will be more interest in construction training programs as people seek out new types of work. Specialty trades, apprenticeship programs, project management training and more tech-focused construction jobs were all listed as areas that contractors believe will see high levels of interest.

Happily, as it affects longer-term business continuity and retirement plans, most contractors (78.89%) reported that, as of the date of this survey, they have not had to delay or shift those plans as a direct result of the pandemic.

Infrastructure spending is a hot topic at the forefront of many contractors’ minds, with more than two-thirds (67.98%) reporting that it is at least moderately important to their business.

See here for more in-depth reporting and advice on how to cope with the effects of the pandemic.

Author & Contact:

Maggie Murphy – Managing Editor

Source: Construction Executive