ARLINGTON, VA. — U.S. construction firms are experiencing widespread project deferrals and cancellations, along with disruptions to ongoing work and few new project awards, according to a survey of new government data released by the Associated General Contractors of America Oct. 28.
Three-quarters of survey respondents reported having a scheduled project postponed or cancelled. That’s up from the 60 per cent of contractors who reported a cancelled project in an August survey and the 32 per cent who did so in June.
Meanwhile, only 23 per cent of contractors report working on new or expanded construction projects as a result of the pandemic, about the same percentage as in June.
“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, in a release. “Without new federal relief measures, these challenges pose a significant threat to current construction employment levels.”
COVID is also disrupting projects that are underway, Simonson noted. Seventy-eight per cent of respondents report they are currently experiencing project delays or disruptions, up from 57 per cent in June. In particular, 42 per cent of firms are experiencing disruptions due to a shortage of construction materials, equipment or parts. In addition, 35 per cent are experiencing disruptions because of a shortage of craftworkers or subcontractors.
Only seven per cent of firms are experiencing disruptions because of a shortage of personal protective equipment.
Thirty-four per cent of respondents report they do not expect their firm’s volume of business will return to pre-pandemic levels for at least a year. Thirty per cent of firms said they have furloughed or terminated employees because of the coronavirus.
The research showed that construction employment fell during the past year in most metro areas. Construction employment fell in 234, or 65 per cent, of 358 metro areas between September 2019 and September 2020. Construction employment was stagnant in 38 other metro areas; meanwhile, only 86 metro areas added construction jobs during the past year.
Simonson added that a majority of firms report they plan to cut jobs or abstain from adding new employees during the coming year. Twenty per cent expect their headcount will shrink while 42 per cent report they do not plan to add to the size of their headcount during the next 12 months.
“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 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.”
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