How COVID-19 impacts the Construction Industry in the Long Term
COVID-19 has posed multiple challenges to industries around the world. The construction industry is equally affected by the COVID-19 pandemic. The industry has been facing challenges on account of supply and logistics in addition increased expenses due to the need to implement required safety and security protocols. There are instances of projects being delayed or postponed as an impact of COVID–19.
In spite of increasing trends of COVID-19 cases, the majority of people are slowly getting back to their routine of life by strictly adhering to social distancing norms. Therefore, the construction industry also needs to start their operations while protecting their employees. Here is summary of the potential long-term impact on the construction industry due to the current challenges in the industry.
- Liquidity crisis in the absence of steady cash flow
- Chance of termination and re-negotiation of contracts
- Delay in completion of projects
- Job loss in the industry
The construction industry lost approximately 975,000 jobs in April, according to an Associated Builders and Contractors analysis of data released by the U.S. Bureau of Labor Statistics. This was the largest recorded decrease in construction jobs since the government began tracking employment in 1939, despite construction remaining an essential industry in much of the nation through April. Non-Residential construction employment lost approximately 560,500 jobs in April. There were job losses in all three non-residential segments, with the largest decline registered among non-residential specialty trade contractors, which lost approximately 393,100 jobs.
The hope was that construction activity would hold up well given the industry’s classification as an essential industry. The level of construction industry job loss in April easily surpassed that of the worst month sustained during the Great Recession, when 155,000 jobs were lost in March 2009. Between April 2006 and January 2011, construction industry employment declined by 2.3 million. The construction industry lost nearly a million jobs in the month of April alone.
Supply chain procurement also impacted widely since States have mandated a stay at home order, and required the adherence of new guidelines during the Pandemic. Many factories that produce construction materials, furniture, fixtures, small tools and equipment are closed temporarily and experiencing the most severe financial crisis ever. As such, it’s become necessary to utilize imported supply chain products while production slowly ramps back up locally.
PRL Co is an e-commerce service provider with supply of Face Masks and other PPE supplies for construction industries. We deliver all the necessary safety products such as Face Masks, Hand Gloves, Sanitizers, and Hands Soap.