Construction Cancellations and Layoffs Continue to Climb

Contractors are implementing further safety measures and applying for payroll loans. Will it be enough?

Giuseppe Miglino/Getty Images

The coronavirus pandemic already has made a significant impact on the United States’ construction industry, slowing production in many states and shutting down activity entirely in others. The situation continues to change quickly, dramatically and almost entirely for the worse, as the most recent survey from the Associated General Contractors of America shows.

According to the latest AGC survey of contractors across the country, 36 percent of construction companies furloughed or terminated the positions of their job site workers. That marks a nearly 10 percent jump from last week’s survey.

Fifty-eight percent of companies reported no change in their head count, and just three percent added new workers, per the survey.

“Owners are not only halting many current construction projects, but are cancelling a growing number of projects that have not yet started,” said Ken Simonson, the association’s chief economist. “Inevitably, that has caused a growing number of contractors to furlough or terminate job site workers.”

The economic ripple effects of pandemic-related project cancellations remain hard to predict, and may affect the construction industry for several years.

For now, contractors are doing everything they can to maintain their current payroll and weather this as best as possible. Seventy-four percent of survey respondents reported they already applied or intend to apply for a loan from the federal Paycheck Protection Program.

When asked what further actions from Congress would most benefit their business, the majority of respondents (48 percent) said that they would prefer “more funding for loans programs to maintain cash flows.”

“The construction industry is ready to rebuild our economy, but that can’t happen without strong federal support and investments,” said AGC CEO Stephen Sandherr.

In the short term, contractors are greatly increasing safety measures on job sites. Ninety-five percent of survey respondents reported integrating social distancing guidelines into operations. Eighty-two percent increased hand washing and sanitizing stations on job sites, while 83 percent limited workforce sizes to less than ten people per site.

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