The Economy Under COVID-19: Notes From the Trenches

There are currently two crises underway simultaneously. The advance of the novel coronavirus is taking a terrible toll in terms of physical and emotional well-being. At the same time, job losses resulting from ‘social distancing’ are sending the economy into a tailspin. To fight on both fronts, governments are advancing rescue packages of never-seen-before dimensions. Every day, the tremendous number of factors in play reconfigure in a new way. These ‘from the trenches’ notes attempt to shed some light along a murky pathway.

On the medical front, there are statistics on infection rates and mortality rates. Such data points are then held up against the figures that prevailed during the SARS and H1N1 outbreaks and the influenza scourge of 1918. On the business side, employment and GDP performances are assessed relative to what occurred during the Financial Crisis, the Great Depression and averages over of all recessions. There’s a lesson to be learned while swimming in this numbers-saturated sea: crises come and go, but statistics live forever.

Add to the list of statistics a new one, the ‘compliance’ rate. The compliance rate is the proportion of the population that is adhering to ‘social distancing’. It’s a surprisingly high 90%. In initial ‘modeling’ about the spread of the disease, only 50% was the assumption made concerning the general population’s willingness to stay indoors to defeat this thing.

ConstructConnect also has some new statistics, a ‘First Appearance’ series and a ‘Changed Status’ series. First Appearance figures track, on a seven-day rolling basis, the number of construction projects (mainly in the planning stage) that are newly discovered and inserted into CC’s database for information access by customers. On April 9, the First Appearance statistic for the U.S. was -26% month over month and -29% versus the same time last year. For Canada, the results were -40% m/m and -39% y/y. With the onset of the coronavirus crisis, the flow of new construction projects has slowed from a cascade to a trickle. Changed Status numbers will be set out in the next ‘Trenches’ story.

Turns out there are some construction opportunities under the current circumstances. For example, school renovation work that would normally get underway in a couple of months, when students are on summer break, can now be brought forward. Many school districts have announced structure closures through the end of term.

A similar situation prevails for roadwork. With greatly reduced vehicular traffic, having more lanes shut down can help to hurry along repaving and widening projects.

Read the previous article here: The Economy Under COVID-19: Notes from the Trenches – April 14, 2020.

Alex Carrick is Chief Economist for ConstructConnect. He has delivered presentations throughout North America on the U.S., Canadian and world construction outlooks. Mr. Carrick has been with the company since 1985. Links to his numerous articles are featured on Twitter @ConstructConnx, which has 50,000 followers.