State of Construction during Coronavirus Pandemic
With summer upon us, the uncertainty within construction markets continues as the industry deals with the fallout from the coronavirus pandemic.
To get real-time data on the impacts of COVID-19, industry associations, like the Association of General Contractors (AGC), have conducted numerous surveys over the last several months. AGC’s latest research shows that construction firm employment is starting to rebound. Of those firms responding, 29% report they have either added employee headcount in June or anticipate adding in the next four weeks. The number of furloughs also appears to be down from May. Firms are still wary about future work, however. Thirty percent of respondents feel it will be more than 6 months before their volume of business returns to a normal level.1
During the crisis, the Census Bureau has also been leaning on frequent “experimental” surveys to supplement some of their more traditional economic data sets. The new Small Business Pulse Survey measures the changes in business conditions on American small businesses during the coronavirus pandemic. Results are released on a weekly basis. Census reporting shows a gradual improvement in the data for the construction industry month over month. When the survey first released in early May, nearly 26% of construction firms were decreasing employee counts. In the most recent survey, that number had declined to 10%. Interestingly, the vast majority of people in this survey also feel it will be more than 6 months before business returns to normal levels.
In addition to the positive changes in employment trends, construction firms are starting to see some increased momentum around projects. Dodge Data & Analytics recently reported nonresidential building starts increased 8% and residential building starts rose 4%.2 At the same time, in May, there was a slight downward trend in non-building projects, like highways and bridges.
The only certainty moving through the summer is that uncertainty will continue to impact construction firms. With this type of uncertainty choose an insurance carrier that understands your client’s business. Someone who knows the ins and out of the construction industry as well as we do. Someone who has helped businesses like your client’s recover from disaster. For 150 years, Great American Insurance Company, the lead insurer of Great American Insurance Group, has provided specialized insurance products to protect businesses like your client’s. Property & Inland Marine protects builders risk projects from cornerstone to completion. Cornerstone Complete® is our new and most comprehensive builders risk product that recognizes the changing and increasing exposures at construction projects. Learn more about Cornerstone Complete: