Construction, like many other industries, was hit hard by the advent of the COVID-19 epidemic. But it is poised to make a strong comeback in 2021 and 2022.
Many industries were hit hard as the pandemic rolled over the US. The virus is spread by tiny water droplets, meaning it can be on touched items as well as spread through the air. This has created the need for constant hand cleaning and mask wearing across much of the world, and frankly, many locations that had to completely change their MO to continue to function during the pandemic. Social distancing required people to not spend time in large groups, not share the same items, and to stay further apart. This was particularly devastating to industries like movie theaters and restaurants, where the whole business model is based on people grouping together for activities. The construction industry faced its share of woes as well.
How the pandemic affected construction early on.
US construction output took a downturn of 6.5% in 2020. Which went against major trends that have had it on a big upswing for the last several years. The pandemic was the reason, but what specific problems did the pandemic pose to construction?
Less commercial confidence
It’s hard for businesses to want to start new constructions if they don’t know that their business will make it. Many industries are on shaky footing now thanks to the pandemic, and across the board people are simply building less.
Difficulty sourcing materials
During the early days of the pandemic, basic materials experienced shortages. Things like sand, bricks, lumber, and plaster are necessary to construction, and shouldn’t be taken for granted. When their production facilities are shut down, prices go up. Of course an increase in prices is just one threat from materials shortages, the other being delays and postponed work.
How the construction industry is set to lead the way during the economic recovery
A boost in construction is a boost to infrastructure as a whole
As the contraction of the industry from 2020 slows and begins to reverse, the US as a whole will reap the benefits. Unlike many types of businesses, construction has a lasting and profound effect on the world around it. Construction contractors aren’t just benefiting themselves and their families when they work, they are also creating value for the whole nation. New roads, bridges, buildings, and businesses increase property values, make peoples’ lives more convenient, while spurring the economy to be more active.
An active construction industry promote long-term resilience. Also, it also helps with improving greenhouse gas emissions and the climate agenda. Greenhouse gas emissions and economic output no longer go hand-in-hand. Economists are recognizing that reducing the effects or climate change now will be hugely beneficial in the future.
Diversification of supply chains
After originating in China, the virus began to spread in late 2019. China was the first nation in the world to experience COVID-19 shutdowns, or lockdowns. As the world watched on, some troubling trends came into view. The first is that China is the largest producer of goods in the world. Developed countries, where labor, materials, and other costs are higher, have been exporting production jobs to China for the last several decades. In the short run, this has damaged domestic suppliers but resulted in a glut of cheap goods. Although developed nations’ consumers can easily afford, the cheap goods, they come with some major drawbacks. In the long run, this has led to China having massive control over much of the world’s supply chain.
When the Chinese economy shut down, the rest of the world realized how much it relies on one single country for much of its goods. Now, many corporations are beginning to diversify to other developing countries, like Bangladesh, Indonesia, and India. This way, in the case of an economic shutdown of one country, the companies won’t be crippled by lack of supply.
Commercial contractors and construction companies are doing the same thing. They are diversifying their construction materials suppliers. Using groups of reliable companies is better for weathering economic uncertainty than having an agreement with one supplier. In this way, future shocks won’t cause sudden supply-chain shortages that result in overpriced materials or building delays.
The pandemic brought about a huge upswing in remote work. A disease spreads much more slowly when people aren’t crowding into offices every day. When it comes to construction, a lot of the danger is mitigated because the work is outside. However, bringing in specialists posed a problem. Those individuals would have to go through airports and risk contact with many others. If they drove, they would have to pass through cities, stay in hotels, and still risk exposure to large groups. Ultimately, travel increases the risk of bringing an infection to the construction site. Fortunately, developments in 3D modeling, BIM, augmented/virtual reality, and remote work mean that working on a site in-person is not always a necessity for certain construction specialists. This is a huge boon for several reasons:
- It promotes sustainability and smaller carbon footprints.
- It’s more efficient and cost-effective.
- Finally, it paves the way for improvements in remote construction work.
Working with the government
Love the government or hate it, it has plenty of money to throw around. The new $2 Trillion Economic stimulus plan is designed with short term growth and long-term sustainability in mind. The construction industry can work directly with the US government to improve infrastructure and make the daily lives of people living in the US better. The ability to take government contracts directly in a way that directly impacts the people is unique to this industry.
Looking to revitalize your business?
Does your business need a recovery of its own? Reliable Commercial Construction can help you build the new construction of your dreams. Whether you want to expand your business to new buildings/locations as the economy recovers, or you think a new look to your existing building is on the menu, Reliable is here for you. Our services range from demolition to renovation to construction, and we offer free design quotes for new constructions. Contact us today to see how we can help your business participate in the post-pandemic recovery.