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Survey: Construction returning to pre-pandemic levels

Staff Report //June 18, 2020//

Survey: Construction returning to pre-pandemic levels

Staff Report //June 18, 2020//

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A new survey found that construction activity is returning to pre-pandemic levels in many parts of the country, but data also shows that future projects are being canceled and others delayed by supply chain issues and labor shortages.

The survey (.pdf) by the Associated General Contractors of America, along with data (.pdf) from construction technology firm Procore, found that, based on workers’ hours, construction activity has returned to pre-COVID 19 levels in 34 states.

Construction workers’ hours in South Carolina increased 24% the week of May 31 compared to the week of March 1, according to the data. For the week of May 24, hours were down 8% compared to the week of March 1.

S.C. workers’ hours dipped as low as 11% below the March 1 baseline for the week of March 22.  

“Many of the immediate economic impacts of the coronavirus have passed and, as a result, activity and hiring are up, a bit,” Ken Simonson, AGC chief economist, said in the release. “But while the immediate crisis appears to have passed, we are just now beginning to appreciate some of the longer-term impacts of the pandemic on the industry.”

The survey found that 8% of construction firms furloughed or laid off workers in June, while 21 percent report adding employees. One in four firms let workers go between March and May.

Moving forward, 12% of construction companies said they plan to furlough or lay off staff during the next four weeks, while 17% anticipate adding workers. However, 42% do not expect demand to return to normal levels for at least four months.

“It is important to remember that construction activity typically increases quite a bit between March 1 and the end of May as the weather improves and more work gets underway,” Simonson said. “Getting to March 1 levels is a sign of progress, but it doesn’t mean things are back to normal.”

Sixty-one percent of firms reported having had at least one project halted or canceled because of the pandemic, while one in four firms reported that materials shortages are causing delays on current projects.

The survey collected responses from more than 630 firms between June 9 and June 17. Procore data is based on tens of thousands of construction transactions nationwide tracked via the company’s software.

The survey broke responses down by region. In the South, 40% of the 178 respondents said they had not halted or canceled work on a current project, though 42% said they had halted work on a project underway in May or earlier and 24% had canceled a project scheduled to start in June. Of the 132 responses to reasons for the halting of projects, 36% cited the project owner’s concern about COVID-19. An equal percentage cited the owner’s expectation of reduced demand for the project.

Nearly half of the 178 respondents from the South said they were not experiencing project disruptions or delays. The most common reasons for delays that were experienced were shortage of construction material, equipment or parts (21%) and shortage of craftworkers (20%).

Fifty-three percent of Southern respondents reported no change in headcount on jobsites, while 8% said they had furloughed or terminated employees in June, compared to 20% in May or earlier.