How The Second Wave Of COVID 19 Has Impacted Construction Industry

While many adhere to the shutdown and work-from-home rules, some US areas have begun loosening restrictions related to COVID-19. Health professionals had estimated that the second wave could possibly hit by winter 2020, and the scary part is that it’s already happening with over 600,000 new cases reported daily worldwide in November 2020.

Construction industry being characterised as a high risk and high investment sector, the second wave has disrupted the industry for the second time, and the results don’t look any good.

Disruption of the global supply chains, stringent safety measures, and rising scepticism in multi-million dollar projects have been the main reasons for the disruption of construction industry. The Associated General Contractors of America (AGC) conducted a survey in October 2020 for identifying any disruptions in Construction projects. The survey received 1077 responses and 78% of them experienced project delays or disruptions.

Highlights of the AGC Survey

While only 22% of the survey response said no to any kind of disruption or project delays, majority of them faced issues due to a wide range of reasons. Based on the survey, the following are the main causes of disruption:

  • Shortage of PPE kits in contractors – 7%
  • Limited supply of materials, equipment or replacement parts – 42%
  • Short supply of government workers – 8%
  • Disruption due to suspected COVID 19 case – 31%
  • Lack of finances or restricted cash flow – 10%

The challenges in construction industry have extended beyond personnel protection from the novel coronavirus. Building projects are facing a shortage of 3 main aspects:

  1. Capital
  2. Materials
  3. Skilled Labour

Out of the 1025 responses regarding late or cancelled deliveries, 54% of the total contractors said that the suppliers notified them about late of cancelled deliveries. This can be mitigated with an increased number of suppliers or by prioritizing local suppliers. However, some disruptions can still be expected.

COVID-19 Impact on Construction Workforce

In the AGC survey, a total of 1015 responses were received when asked for a change in construction company’s headcount. The following were the summary of responses:

  • 30% said that they have furloughed or terminated employees.
  • 27% hired new employees.
  • 49% experienced no change in their workforce.

In other cases, many companies tried recalling the furloughed employees, and only 46% confirmed that the furloughed employees had reported to work. The remaining refused mainly due to the following reasons:

  • Preferred to keep the unemployment benefits – 34%
  • Concerned about COVID-19 or family responsibilities – 37%

Construction Project Schedules

AGC asked many contractors, and from the 994 respondents, 75% said that their clients had postponed or cancelled work. March 2020 to September 2020 experienced over 61% of postponed or cancelled work.

Out of the 950 responses, 33% believe that their business would take over 6 months to return to normal, and 21% were unsure about the future.

46% contractors of the total 864 responses believe that investments by the US Government in public infrastructure would help the speedy recovery of the construction industry.

Some evidence suggests that larger contractors were heavily impacted by the COVID-19 pandemic. For firms with revenue over $500 million, 88% experienced postponed or cancelled projects. This is reduced to 73% for contractors with revenue under $50 million.

Final Words

It is evident that the second wave of COVID-19 has disrupted the construction industry. However, there are effective ways of adapting and maintaining the steady pace of projects. By relying on virtual engineering services, project developers can complete stages like planning, design and project approval remotely.