Coronavirus' Impact on Construction

March 17, 2020

The coronavirus outbreak has begun disrupting global supply chains in every industry, but the economic outlook for construction is changing “day by day, not minute by minute,” according to Ken Simonson, chief economist for the Associated General Contractors of America. 

Simonson said that although it will take a bit of time for Chinese factories to start up again, inventories in the US seem to be sufficient to keep some small projects going. However, for big projects, coronavirus-related disruptions to material supplies have major implications, he said. Stadium construction is one of the largest markets that could see effects. 

Equipment operators affected by Covid-19?

Simonson also suggested the coronavirus could cause a crane operator to self-quarantine or cause truck drivers for concrete companies to not show up with shipments, SmartBrief reports.

Simonson believes the pandemic might cause short-terms disruptions to job growth in the industry, but that the US economy should continue to add jobs this year. He is optimistic about the prospects for single-family homebuilding due to a consumer-friendly market benefiting from low interest rates. Construction in the power and energy sector will also remain strong, according to Simonson. 

Covid-19 effects on construction markets

The market for highway and transportation projects should continue to flourish as state highway funds and toll projects increase. However, construction markets for high-end retail, entertainment, lodging, and light rail could take a hit due to coronavirus. 

Simonson predicts there will be a 2 to 6 percent increase in total construction spending this year due to an expected 5 to 9 percent increase in residential construction spending.