The coronavirus pandemic has caused more than one in four contractors to halt or delay work on current projects, according to a survey the Associated General Contractors of America (AGC) released March 20.
The survey results show how quickly market conditions have changed compared to data showing a majority of metro areas added construction jobs through January.
AGC officials note that a relief bill the Senate is considering includes some favorable tax and loan provisions. But officials also say the bill needs new infrastructure investments and improvements to the new paid sick and family medical leave measures.
“The coronavirus pandemic has the potential to undermine what had been a very robust construction market, threatening the livelihood of countless workers and the viability of many firms,” says Ken Simonson, AGC’s chief economist. “Providing additional tax credits and loans will help, but contractors also need the certainty that comes with infrastructure funding and improvements to the new paid and family leave measures.”
In AGC’s online survey conducted between March 17 and March 19, 28 percent of 909 respondents replied “yes” to the following question: “Has any owner, government agency or official directed you to halt or delay work on any projects that are either active or expected to start within the next 30 days?”
In addition, 22 percent of respondents say a supplier had notified them that deliveries would be late or canceled.
Contractors listed numerous types of delays and shortages. Nearly one out of five surveyed (18 percent) cited shortages of required government actions or personnel, for instance to issue permits or certificates of occupancy, conduct inspections or lettings, or make project awards.
Sixteen percent noted a shortage of materials, parts or equipment, including workers’ personal protective equipment such as respirators. Eleven percent reported a shortage of craft workers as individuals self-quarantine or stay home to care for others.
Underscoring how rapidly market conditions have changed, AGC also released data on construction employment changes between January 2019 and January 2020 in 358 metro areas. According to the association, the data shows how strong the market was two months ago.
A majority – 200 areas (56 percent) – added construction jobs, while 95 areas lost jobs. Sixty-three metros had no change.
The Senate relief bill
Additionally, AGC officials say a newly released Senate relief measure does too little to help the increasingly hard-hit construction industry. They note that the tax and loan provisions in the measure will help offset declining demand. But they urge Senate leaders to include new funding for infrastructure projects and to protect the retirements and health care of construction workers in multi-employer plans.
AGC officials also called for additional fixes to measures enacted earlier this week that force employers to front the cost of newly mandated paid family and sick leave measures.
“The Senate proposal offers a good start to helping offset the sudden drop-off in work many contractors are experiencing,” says Stephen Sandherr, the association’s CEO. “But without real investments in new infrastructure, compensation for contractors’ lost work and upfront funding for paid sick and family medical leave, it does too little to help the industry and its nearly 8 million employees.”
Separately, Sandherr and Sean McGarvey, the president of North America’s Building Trades Unions, issued a statement March 21 urging government officials to exempt construction work from regional, state and local work shutdowns.
“Government officials at all levels should treat the construction industry and the work it performs as vital and essential to the critical industries that must remain in operation,” the statement reads. “Construction workers provide an invaluable economic service, maintaining and improving the nation’s infrastructure, including critically important energy and communication systems, roads and bridges, and social infrastructure, including police, fire and health care facilities.”