Commercial construction starts are expected to fall by 16% in 2020, with retail starts projected to be down by 33% and hotel/motel starts by 31%.
That’s the grim outlook that Richard Branch, chief economist for Dodge Data & Analytics, foresees that reflects the current and potential impact of the coronavirus on North America’s construction industry.
Also see: The American department story was already in trouble. Then the virus hit.
“We are in recession. Full stop. No question about it,” asserts Branch. His forecast takes into account epidemiological assumptions that infections will peak in May and begin to subside in July. “What’s next is [figuring] out the depth of this recession and what a potential recovery looks like.”
[Construction forecast] Economic conditions blamed for project delays
A Dodge poll of 172 contractors across the country, conducted from March 19-31, found that close to two-thirds of respondents were worried about recession. Sixty-seven percent of contractors said they were experiencing project delays, and of that total, 38% blamed “worsening economic conditions.” Almost half (47%) expected their businesses to be “highly impacted” by the virus’s spread within the next three months, including the fear among 55% of contractor respondents that their workers might be more susceptible to COVID-19 infection.
Richard Branch, Dodge Data & Analytics' chief economist, says construction is already in a recession. Image: Dodge Data & Analytics
Also see: Construction employment declines in 20 states and DC in March
A silver lining to this health crisis could be pent-up demand. Dodge, which tracks construction work around the country, estimates that more than 200,000 projects were in preplanning or planning stages as of March 30. But fewer than 17,000 public projects were actively bidding as of April 2.
[Construction forecast] Homebuilding also looks precarious
Dodge Data & Analytics also projects that residential construction would be off by 13% this year, which augurs bad news for the rest of 2020, considering the Census Bureau’s preliminary estimate for March housing starts, which at a seasonally adjusted annual rate of 1.216 million units was down only 1.4% from the same month in 2019.
Also see: Multifamily market flattens as construction proposal activity sinks
Related Stories
Multifamily Housing | Jul 7, 2021
Make sure to get your multifamily amenities mix right
One of the hardest decisions multifamily developers and their design teams have to make is what mix of amenities they’re going to put into each project. A lot of squiggly factors go into that decision: the type of community, the geographic market, local recreation preferences, climate/weather conditions, physical parameters, and of course the budget. The permutations are mind-boggling.
Multifamily Housing | Jun 30, 2021
A post-pandemic ‘new normal’ for apartment buildings
Grimm + Parker’s vision foresees buildings with rentable offices and refrigerated package storage.
Multifamily Housing | Jun 23, 2021
COVID-19’s impact on multifamily amenities
Multifamily project teams had to scramble to accommodate the overwhelming demand for work-from-home spaces for adults and study spaces for children.
K-12 Schools | Jun 20, 2021
Los Angeles County issues design guidelines for extending PreK-12 learning to the outdoors
The report covers everything from funding and site prep recommendations to whether large rocks can be used as seating.
Coronavirus | May 17, 2021
Future pandemic preparedness at the medical district scale
The current COVID-19 pandemic highlights the concern that we will see more emergency events in the coming years.
University Buildings | Apr 29, 2021
The Weekly Show, April 29, 2021: COVID-19's impact on campus planning, and bird management strategies
This week on The Weekly show, BD+C Senior Editor John Caulfield interviews a duo of industry experts on 1) how campus planning has changed during the pandemic and 2) managing bird infestations on construction sites and completed buildings.
Multifamily Housing | Apr 22, 2021
The Weekly Show, Apr 22, 2021: COVID-19's impact on multifamily amenities
This week on The Weekly show, BD+C's Robert Cassidy speaks with three multifamily design experts about the impact of COVID-19 on apartment and condo amenities, based on the 2021 Multifamily Amenities Survey.
Industry Research | Apr 9, 2021
BD+C exclusive research: What building owners want from AEC firms
BD+C’s first-ever owners’ survey finds them focused on improving buildings’ performance for higher investment returns.
Coronavirus | Mar 31, 2021
Theatrical fog formula approved as antimicrobial air treatment
At least two solutions are being used to make ventilation systems safer.
Office Buildings | Mar 30, 2021
WELL Institute certifies a gigantic office complex with its highest health and safety rating
Poland’s Olivia Business Center one of the first to install ion air purification devices.
