Construction spending in February increased 6.0% from February 2019, with year-over-year gains in both residential and nonresidential outlays, according to a new analysis of federal data released today by the Associated General Contractors of America. Association officials cautioned that their latest survey shows conditions for contractors have deteriorated rapidly since February. They called on Congress to urgently pass targeted recovery measures to boost infrastructure funding, compensate firms for lost or delayed federally funded work, and provide needed pension relief.
“Spending in February declined 1.3% from an upwardly revised, exceptionally strong pace in January that was aided by unusually mild winter weather in much of the country,” said Ken Simonson, the association’s chief economist. “Together, the rate in the first two months of 2020 represents a high-water mark immediately before government officials ordered widespread business closures and project owners canceled or halted work on their sites. The survey we conducted March 23 to 26 found that 39% of the more than 1600 respondents said they had been directed to stop work on one or more projects.”
Simonson added that 45% of respondents reported experiencing project delays or disruptions. Shortages of material, parts and equipment, including vital personal protective equipment for workers such as respirators, were reported by 23% of respondents. Eighteen percent reported shortages of craftworkers, while 16% said projects were delayed by shortages of government workers needed for inspections, permits and other actions. Thirteen percent said delay or disruption had occurred because a potentially infected person had visited a jobsite.
“When projects shut down, jobs are lost not only in construction but also in a host of other industries, ranging from quarries to manufacturers, and truckers to professional services,” the economist noted. “Investing in infrastructure now will bring these jobs back sooner and will buy a lot more construction while fuel and materials costs are low.”
Association officials said that, considering that 39% of contractors have had at least one project canceled or delayed because of the coronavirus, construction spending is likely to decline for the foreseeable future. They added that firms will have a hard time continuing to pay current staff under these conditions and called on Washington officials to make new investments in infrastructure, provide relief from losses incurred on delayed or canceled federally funded projects, and pass protections for multi-employer pensions in order to help the industry recover from the economic impacts of the pandemic.
“The pandemic is prompting a collapse in demand for commercial construction, putting tens of thousands of jobs at risk,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress and the administration must do more to make sure that efforts to flatten the curve don’t flat-line this industry and its millions of jobs.”
Related Stories
Coronavirus | Jun 14, 2020
A new report on how campus buildings can reopen safely
Leo A Daly white paper suggests dividing students into smaller “cohorts,” and assigning bathroom spaces.
Coronavirus | Jun 12, 2020
BD+C launches 'The Weekly,' a streaming program for the design and construction industry
The first episode, now available on demand, features experts from Robins & Morton, Gensler, and FMI on the current state of the AEC market.
Coronavirus | Jun 9, 2020
Going viral: How the coronavirus pandemic could change the built environment
Architecture and construction firms—and their clients—are asking new questions about infection control as it pertains to people assembly, building wellness, and technology.
Fire and Life Safety | Jun 9, 2020
NFPA develops business reopening checklist for fire and life safety measures
The new checklist helps building owners and facility managers ensure fire and life safety as businesses prepare to re-open amid the coronavirus pandemic.
Coronavirus | Jun 9, 2020
CannonDesign unveils COVID Shield
As the world evolves its response to the COVID-19 pandemic, one clear reality is testing for the virus will be part of our daily lives for the foreseeable future.
Coronavirus | Jun 5, 2020
3 strategies to improve the wellness of building systems and gain tenant trust
Three operational issues that must be prioritized for every building in order to achieve tenant trust are air quality/ventilation, relative humidity, and building commissioning.
Coronavirus | Jun 2, 2020
5 ways to improve hand washing and minimize germs in public restrooms
Bradley Corp. offers five upgrades to make public restrooms more sanitary.
Coronavirus | Jun 2, 2020
Perkins and Will, Healthy Building Network advise against the use of antimicrobial building products
Even during a pandemic, antimicrobial building products may do more harm than good.
Coronavirus | May 30, 2020
A welcoming entry-point for wellness screening anywhere
Modular WorkWell™ ecosystem can process up to 40 people per minute.
Coronavirus | May 29, 2020
Black & Veatch, DPR, Haskell, McCarthy launch COVID-19 construction safety coalition
The NEXT Coalition will challenge engineering and construction firms to enhance health and safety amid the Coronavirus pandemic.