Thirty-nine percent of US contractors reported that project owners have halted or canceled current construction projects amid deteriorating economic conditions, according to a survey released Friday by the Associated General Contractors of America. Association officials warned that these cancellations mean massive job losses are likely soon unless Congress passes targeted recovery measures to boost infrastructure funding, compensate firms for lost or delayed federally funded work and provide needed pension relief. The project cancellations are particularly severe in light of new data showing that 42 states added construction jobs through February.
“The abrupt plunge in economic activity is taking a swift and severe toll on construction,” said Ken Simonson, the association’s chief economist, noting that only 18 percent of respondents have been ordered to halt work by elected officials. “The sudden drop in demand stands in sharp contrast to the strong employment levels this industry was experiencing just a few weeks ago.”
In the association’s latest online survey, conducted between March 23 and 26, 45 percent of the 1,640 respondents reported experiencing project delays or disruptions. Shortages of material, parts and equipment, including vital personal protective equipment for workers such as respirators, were reported by 23 percent of respondents. Eighteen percent reported shortages of craftworkers, while 16 percent said projects were delayed by shortages of government workers needed for inspections, permits and other actions. Thirteen percent said delay or disruption had occurred because a potentially infected person had visited a jobsite.
The survey also found that 35 percent of firms said suppliers had notified them or their subcontractors that some deliveries would be delayed or canceled, the economist added. He noted that only 22 percent reported similar supply chain challenges last week. That survey was conducted between March 17-19. However, eight percent of firms did report they have added new work expanding health care and other facilities needed to respond to the growing health crisis.
On Saturday, March 28, the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency clarified construction’s role in supporting existing infrastructure, designating the sector an “essential industry.”
Specifically, federal officials have opted to identify construction and related activities, including the manufacture and delivery of construction supplies and safety equipment and the permitting and inspection of projects, in 25 different parts of its guidelines, compared to four times in its prior iteration, the AGC reported.
“That is because federal officials understand the essential role construction plays in supporting our critical infrastructure and economic activities,” the AGC said. “They also understand that construction activity can continue to occur in a way that protects workers and the general public from the spread of coronavirus.”
“Moving forward, we are eager to work with state and local officials to help them better understand how to heed this new federal guidance so they can continue, or begin, to allow construction work to proceed in their jurisdictions,” the AGC said.