Ken Simonson, chief economist for the Associated General Contractors, issued a video opinion/editorial comment on current construction economic conditions today.
Here’s a transcript of his message:
The construction industry, like the economy as a whole, was severely harmed by the outbreak of the coronavirus pandemic with a drop in construction employment of more than a million construction jobs in March and April.
The industry has since regained more than half of those jobs through July. But the latest figures show that the job gains in July totaling 20,000 were concentrated entirely on residential home building, additions and remodeling.
On the nonresidential side, job totals slipped by 4,000.
Unfortunately, going ahead, it looks as if more and more nonresidential jobs will be cancelled or postponed both by private owners, institutions such as universities and state and local governments that have balanced budget requirements that must be satisfied by next June 30th.
The best prospects for construction come from remodeling projects and other things related to coping with the coronavirus with the fact that people are doing more and more work, schooling and entertaining from home and therefore are ordering more things that need to be delivered through local distribution points, need improved connectivity, which may trigger spending on fiberoptic cable, cell towers and data centers.
But the long-term prospects for construction depend very heavily on the nation recovering from the pandemic and the federal government putting more funds into infrastructure spending.