Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Coronavirus is smack in the middle of American construction.
- Keep your distance of 6 feet
- Working remotely when possible
- Keep meetings to 10 or less
- And above all, the main priority of the safety of all employees on jobsites and offices
An AGC survey of contractors nationwide has found that 28% have either stopped or reduced activity. The survey also revealed that 22% say they’ve been advised by suppliers that materials would be late or cancelled
The states of Washington and Pennsylvania have shut down all construction work in the heat of the virus outbreak — that includes all residential and nonresidential construction. PennDOT ordered all projects shuttered until further notice. Only some emergency repairs are being permitted.
The city of Boston and three other Massachusetts cities and Austin, Texas, have ordered all construction projects to cease operation in light of the outbreak and keep only those people necessary to maintain security at jobsites. Road work will only be done on an emergency basis in Boston as necessary.
Nine counties surrounding San Francisco issued a shelter in place order that exempts construction work. And shelter in place orders by the governors of California, and Illinois also exempt construction.
Interestingly in Seattle, one of the hardest areas hit by the virus, work continues on expansion of SeaTac Airport, the region's busiest; although work on one terminal building was stopped for two weeks under COVID-19 guidelines.
AGC is also urging the Trump Administration to add construction to the list of critical infrastructure industries so future state and local areas are less likely to restrict development and maintenance of essential infrastructure. This would include roads and highways, public transportation, water, gas and electrical systems.
On March 17th the Trump Administration asked that all construction companies donate their inventories of N95 facemasks to hospitals and forgo future orders of them until the virus emergency is over. The Administration said the N95 masks are perfectly suitable for hospital use and have the ability to filter 95% of airborne particles.
Unemployment increases
Nationwide unemployment has skyrocketed to a record amount of 3.3 million claims filed last week — that’s more than five times the previous record of 695,000 set back in 1982 — amid the widespread coronavirus shutdown. The U.S. Labor Department said the surge in weekly applications is certain to accelerate as states are able to accommodate thousands more of laid off workers.
The jobless rate was 3.4% in late February. Economists are cautioning that the national unemployment rate could reach 13% by May. By way of comparison, the highest jobless rate during the 2009 recession never exceeded 10%.
No infrastructure package
Washington lobbyists and veterans of infrastructure money battles in the nation's capitol are now saying publicly what has been whispered privately for months: there will be no major infrastructure initiative during Donald Trump's first four years in the White House. It all boils down to reluctance to raise the federal fuels tax, Democratic resistance to awarding the President a legislative victory and the Trump Administration refusal to replenish the Highway Trust Fund.
That $2 trillion package that was boasted about in 2017 has long vanished from official. Washington and industry lobbyists are hopeful that 2021 will bring about a new effort.
Construction starts 2020 positive
ABC says its Construction Backlog Indicator in January rose to 8.9 months, an increase of 5.9% from December. Chief Economist Anirban Basu says the data indicates that construction entered 2020 with plentiful momentum. What will happen in the ensuing months after the nation recovers from the coronavirus pandemic is likely a different story. Basu says nonresidential construction will emerge as one of the broader economy's stalwarts of stability.
According to the U.S. Census Bureau, U.S. construction spending for commercial and residential projects rose to a record $1.369 trillion in January. The seasonally adjusted rate was 1.8% higher than in December and the biggest monthly increase in nearly two years. Private residential construction rose to the highest rate since May 2019 at $554 billion. However, the Housing Market Index slipped one point to 75, according to the National Association of Home Builders and Wells Fargo, as a result of labor and supply constraints. This was well before the coronavirus downturn.
Lodging Econometrics reports its hotel construction pipeline ended 2019 on a record high. Worldwide there are 15,000 projects totaling 2.5 million rooms in the pipeline for 2020. That’s an 11% increase in construction and 8% increase in the number of rooms from 2019.
In closing, success often comes from taking a misstep in the right direction.
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