As the economic damage from the coronavirus (COVID-19) pandemic continues to weigh on construction employment, many firms are reporting widespread project deferrals and cancellations, according to a new survey of construction firms and an analysis of government data by the Associated General Contractors of America (AGC). The AGC survey also found that many firms are experiencing continued disruptions to ongoing work and few new project awards.
Three-quarter of respondents to the latest AGC survey, conducted between October 7 and October 19, report having a scheduled project postponed or cancelled, up from the 32% who reported a cancelled project in the AGC’s June survey. According to the October AGC survey, fewer than one quarter of contractors report working on new or expanded construction projects as a result of the pandemic.
“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,” AGC chief economist Ken Simonson said in a news release.
COVID-19 is also having a large impact on projects that are still underway, with 42% of responding firms reporting disruptions due to a shortage of construction materials, equipment, or parts. Additionally, 35% of firms are experiencing disruptions because of a shortage of craftworkers and subcontractors.
The continuing disruptions to operations is clouding contractor outlook for the future, according to the AGC. Thirty-four percent of respondents report they do not expect their firm’s volume of business to return to pre-pandemic levels for at least a year. Such business tailwinds threaten to undermine employment levels, and 30% of firms report they have already furloughed or terminated employees because of COVID-19.
These contractor sentiments are reflected in the latest government employment data, which indicates construction employment has decreased in 234, or 65%, of 358 metro areas between September 2019 and September 2020. Houston-The Woodlands-Sugar Land, Texas and New York City experienced the largest decline in industry employment numbers over the past 12 months, while Brockton-Bridgewater-Easton, Mass., and Altoona, Pa., experienced the largest percentage decline in industry employment. Conversely, Dallas-Plano-Irving, Texas and Baltimore-Columbia-Towson, Md., added the most construction jobs in pure numbers on a year-over-year (YOY) basis.
The AGC survey indicates that a majority of firms report they plan to cut further jobs or abstain from adding new employees in the coming year. One in five responding firms expect their headcount will shrink in the next 12 months while two in five report they do not plan to add to the size of their headcount during the next calendar year.
