More projects were cancelled than started as Covid ravaged US this year

As Covid-19 depressed demand in a "deeply wounded" economy this year, more construction projects were cancelled than begun, according to a survey of contractors by the Associated General Contractors of America (AGC).

According to the survey:

  • 75% of respondents said scheduled project work had been postponed or cancelled, up from 60% in August, and 32% in June
  • 78% of firms were experiencing project delays or disruptions, a 21% increase since June
  • 23% of contractors were working on new or expanded projects
  • 42% of firms said they had suffered disruption due to materials shortages, 35% had a shortage of craftworkers or subcontractors, and 7% had a shortage of personal protective equipment
  • 34% of contractors estimated that their business would not return to pre-pandemic levels for at least a year.

The AGC also analysed government data, which showed that construction employment fell 34% in metropolitan areas between September 2019 and September 2020.

Some 30% of contractors had already furloughed or terminated employees as a result of the coronavirus, and most firms planned to either cut jobs or would abstain from recruiting in the near future.

The association urged congressional leaders to pass coronavirus relief measures, such as infrastructure investments, liability reforms and additional paycheck protection loans.

Ken Simonson, the AGC’s chief economist, said: "The survey results make it clear that the months-long pandemic is undermining demand for projects, disrupting vital supply chains and clouding the industry’s outlook.

"Without new federal relief measures, these challenges pose a significant threat to current construction employment levels."

Stephen Sandherr, the AGC’s chief executive, said: "As our survey shows, the pandemic and efforts to mitigate its spread have deeply wounded the economy, depressing demand for many types of commercial construction projects.

"Congress can end the downward economic slide and help create construction jobs by passing measures to boost demand and protect honest employers."

Image courtesy of Raymond Gregory/Dreamstime

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