As we hit the halfway mark of 2020 it is safe to say that this year has thrown up some unpleasant surprises and none more so than the spread of COVID-19. The global pandemic has brought economies to a standstill and left many of us desperately racing down the supermarket aisles for the last rolls of toilet paper.
Now with the world moving towards an easing of lockdowns and a post-pandemic state, we are asking: what will happen to the construction industry and what kind of growth can we expect?
Short Term Future of the Industry
The disruption caused by COVID-19 has predictably been dramatic. Although public construction has maintained some normalcy around the world, supply chains are in disarray and there is a shortage of materials and labor that is up to date with the latest health and safety regulations, meaning work is likely to come to a halt before you know it.
In smaller construction subsectors firms are dealing with enormous amounts of stress, leaving most to sit tight and conserve what cash reserves remain.
A recent executives survey carried out in April by McKinsey predicted what you might have been expecting, stating that we are likely to see a growth of between 0% and -8% in 2020. Although this isn’t what we want to hear, perhaps there is still reason to remain optimistic.
Long Term Future of the Industry
As we continue to delve deeper and explore the topic of the construction industry growth post-COVID-19, it is clear that the future doesn't look pretty. As the record levels of unemployment take the legs out from under our fragile economy we are likely to see decreased demand for all sectors of the construction industry.
Things are always evolving and now more than ever we need these changes to be taking place as quickly as possible. In light of COVID-19 we are going to see many changes. As the cost of labor increases expect to see far more technological innovations with future construction becoming almost fully automated.
Although we may be currently weathering the storm and have to be realistic about the impacts on the construction industry, there are few things as powerful as optimism and a recent Procore survey showed that 81% of owners and developers are anticipating an economic rebound before the end of 2020. Although there is no definitive answer without a crystal ball, the construction sector remains hugely important to the US and we can expect this trend to continue.
“Seven million Americans work in construction, nearly three times as many as work for the federal government…if there’s one thing that keeps our country moving, it’s building.” - Carlo Scissura, the president of the New York Building Congress