[NEWS TRACKER] Construction Delays Expected from Coronavirus and Protests

Construction in several major cities has been impacted by ongoing protests and delays continue from impacts of the coronavirus pandemic; plus more industry news in the June 11, 2020, edition of Construction News Tracker.

Construction News Tacker is presented by Caterpillar and produced by ForConstructionPros.com.

Unemployment starts to decrease

After weeks of predictions from economists that the nation's unemployment rate would reach 20% or greater, the numbers for May indicate otherwise. Unemployment dropped unexpectedly to 13.3% for the month as businesses began recalling workers faster than expected. But the Labor Department has acknowledged making errors in how it classified people as employed in the midst of the virus, and says the real figure is worse than the numbers indicate.

News the economy added 2.5 million jobs last month is apparent evidence that the job market collapse may have bottomed out in April.

Construction facing delays

Construction has been impacted in several major cities nationwide in response to the protests of the death of a Minneapolis man George Floyd. Jobsite fires along with city mandated construction shutdowns have occurred while in some cases contractors have voluntarily halted operations until the demonstrations cease. The most affected appears to be Chicago where all worksite operations were halted May 29th on orders of the city as many roads were closed down as well.

The April analysis of construction has been released and shows a smaller drop than forecasted by economists at 2.9%. Wells Fargo Chief Economist Mark Vitner suggests that we may start to see some improvement in single family spending now that restrictions are being eased in many parts of the country.

A bit of wishful thinking that lacks any real support in the spending numbers. There's a hint of support in the permits data that came with the latest housing starts analysis, but Vitner's seems like a bold suggestion in light of breathtaking unemployment figures.

Moodys Analytics is reporting that contractors can expect more construction delays as a result of the coronavirus. Its research finds that 82% of all multifamily projects started since 2002 were completed at a month behind schedule while the average completion date for a multifamily development had a four-month delay in completion.

Industrial, retail and office projects ranged from three to four months delay in completion, and that was before the coronavirus struck the U.S. That effect on the world's economy has disrupted supply chains and other business processes, and the ongoing fear of a resurgence of the virus into the fall spells trouble for construction moving forward.

OSHA issues coronavirus guidance

OSHA has issued two new enforcement guidance notices in the midst of the COVID-19 virus outbreak that are of interest to contractors. One requires employers to register when an employee falls ill with the virus. The second covers reporting requirements for employers encountering cases of the virus on their workforce. Both OSHA notices cover the duration of the epidemic outbreak, and we encourage you to check them out carefully.

PPP program restrictions ease

The Congress has voted to ease restrictions on the PPP Program of small business loans. Companies will be allowed to use a smaller share on employee payroll, extend to six months the time companies have to use the funds, and extends the time companies have to repay the loans. Areas of contention supported by AGC and others.

Flooding continues in Michigan

May 19th has come and gone, but the deluge from two dam breeches in central Michigan continues. The state DOT reports that 20 state highway and local area bridges were closed due to flooding and many will need to be repaired before they can be reopened. MDOT has established emergency contracts to begin the inspection process using robot devices and repairs when the water levels recede enough for work to begin.

Meanwhile a host of roadway closures remain with detours in place causing residents to rethink their routes in the interim.

Lumber prices start to increase

Signs that the nation's home building business might be salvaged along with brisk home improvement store business has caused the lumber futures market to soar since April. As stay at home orders ease, lumber futures have jumped 45% from a low April 1st on the Chicago Mercantile Exchange. Mills were shut down in March and April during the pandemic, though officials now say they have come roaring back to meet the need of builders and retailers to within 20% of their downturn and are ramping higher each day.

Denver airport construction

Due to low passenger traffic and less airplane disruptions the Denver Airport Commission has asked for contract amendments of $560 million to expand construction volume. It would allow work to accelerate during the COVID-19 shut down and concentrate on two concourse areas under reconstruction by five contractors.

The proposal follows the collapse of a $1.8 billion public-private partnership last year with Great Hall Partners. Since that decision, Denver officials have decided against any futher P3 partnerships and gone the contractor route instead.

In closing, there is nothing so unequal as the equal treatment of unequals. Individualize your leadership.

This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.

Follow us on social media at Twitter using #constructionnews, YouTube and Facebook as the streaming Web never ends.

View previous Construction News Tracker videos on ForConstructionPros.com.