Construction firms are experiencing widespread project deferrals and cancellations, along with disruptions to ongoing work and few new project awards, as the economic damage from the pandemic drags down industry employment in metro areas across the nation, according to a new survey and an analysis of new government data that the Associated General Contractors of America released today. Association officials urged Congress to pass new coronavirus relief measures to head off further job losses.
“The survey results make it clear that the months-long pandemic is undermining demand for projects, disrupting vital supply chains and clouding the industry’s outlook,” said Ken Simonson, the association’s chief economist. “Without new federal relief measures, these challenges pose a significant threat to current construction employment levels.”
Simonson noted that three-quarters of survey respondents report having a scheduled project postponed or canceled. He added that is up from the 60% of contractors who reported a canceled project in our August survey and 32% who did so in June. Meanwhile, only 23% of contractors report working on new or expanded construction projects as a result of the pandemic, about the same percentage as in June.
The coronavirus is also disrupting projects that are still underway, Simonson noted. Seventy-eight percent of respondents report they are currently experiencing project delays or disruptions, up from 57% in June. In particular, 42% of firms are experiencing disruptions due to a shortage of construction materials, equipment or parts. In addition, 35% are experiencing disruptions because of a shortage of craftworkers and/or subcontractors. In one bit of good news, however, only 7% of firms are experiencing disruptions because of a shortage of personal protective equipment.
Shrinking demand and disrupted operations are shaking many contractors’ faith in the future, the survey showed. Thirty-four percent of respondents report they do not expect their firm’s volume of business will return to pre-pandemic levels for at least a year.
Delays, disruptions and uncertainty threaten to undermine employment levels in the construction sector. In fact, 30% of firms report they have already furloughed or terminated employees because of the coronavirus.
That is likely why construction employment fell during the past year in most metro areas, Simonson added. Construction employment fell in 234, or 65%, of 358 metro areas between September 2019 and September 2020. Construction employment was stagnant in 38 other metro areas, meanwhile, and only 86 metro areas added construction jobs during the past year.
Houston-The Woodlands-Sugar Land, Texas lost the most construction jobs over those 12 months (-24,400 jobs, -10%), followed by New York City (-19,500 jobs, -12%). Brockton-Bridgewater-Easton, Mass. had the largest percentage decline (-36%, -2,000 jobs), followed by Altoona, Pa. (-32%, -1,000 jobs) and Johnstown, Pa. (-32%, -900 jobs).
Dallas-Plano-Irving, Texas added the most construction jobs from September 2019 to September 2020 (5,100 jobs, 3%), followed by Baltimore-Columbia-Towson, Md. (4,700 jobs, 6%). Walla Walla, Wash. had the highest percentage increase (25%, 300 jobs), followed by Fond du Lac, Wisc. (15%, 500 jobs).
Simonson added that a majority of firms report they plan to cut jobs or abstain from adding new employees during the coming year. Twenty percent expect their headcount will shrink while 42% report they do not plan to add to the size of their headcount during the next twelve months.
Most firms participating in the survey, 78%, cited a preference for new federal relief measures to mitigate against the impacts of the coronavirus. Among the measures firms are hoping Washington officials will enact are new federal investments in infrastructure, liability reforms that protect responsible firms from frivolous coronavirus suits and a new highway and transportation bill.
As a result, association officials urged Congressional leaders to recall legislators right after the election to pass much-needed new coronavirus relief measures. In particular, the construction officials called on Congress to new infrastructure investments, liability reforms and an additional round of Paycheck Protection Program loans.
“As our survey shows, the pandemic and efforts to mitigate its spread have deeply wounded the economy, depressing demand for many types of commercial construction projects,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress can end the downward economic slide and help create needed new construction jobs by passing measures to boost demand and protect honest employers.”
View the survey results. View the metro employment 12-month data, rankings, top 10, and map.
Related Stories
Market Data | Apr 13, 2020
6 must reads for the AEC industry today: April 13, 2020
How prefab can enable the AEC industry to quickly create new hospital beds and Abu Dhabi launches a design competition focused on reducing urban heat island effect.
Market Data | Apr 10, 2020
5 must reads for the AEC industry today: April 10, 2020
Designing for the next generation of student life and a mass timber Ramada Hotel rises in British Columbia.
Market Data | Apr 9, 2020
7 must reads for the AEC industry today: April 9, 2020
Urine could be the key to building in outer space and how to turn a high school into a patient care center in just over two weeks.
Market Data | Apr 8, 2020
6 must reads for the AEC industry today: April 8, 2020
Stantec discusses how hospitals can adapt buildings to address worst-case scenarios and FXCollaborative Architects tells us why cities will survive the pandemic.
Market Data | Apr 7, 2020
7 must reads for the AEC industry today: April 7, 2020
Leo A Daly's Hotel2Hospital prototype takes shape, while the number of delayed projects reaches 2,550 in the U.S. amid coronavirus pandemic.
Market Data | Apr 3, 2020
COVID-19 cuts nonresidential construction employment in March
The construction unemployment rate was 6.9% in March, up 1.7 percentage points from the same time one year ago.
Market Data | Apr 1, 2020
February’s construction spending decline indicates what’s to come
Private nonresidential spending declined 2% on a monthly basis and is down 0.7% compared to February 2019.
Market Data | Mar 26, 2020
Architects taking action to support COVID-19 response
New AIA task force will offer insights for adapting buildings into healthcare facilities.
Market Data | Mar 26, 2020
Senate coronavirus relief bill's tax and lending provisions will help construction firms, but industry needs additional measures
Construction officials say measure will help firms cope with immediate cash flow crunch, but industry needs compensation for losses.