State of the Construction Industry: August 2021 Roundup
Though it looked for a moment as if we might enjoy a reprieve from the COVID pandemic as vaccines were delivered, the powerful new Delta variant and loosening of restrictions led to a new surge in cases nationwide. In response, many areas are reimplementing restrictions ranging from mask mandates to lockdowns.
The surge in COVID cases is also affecting construction work. Projects around the United States are being impacted by worker shortages, soaring construction material costs, delays, or even outright stoppages. A couple of examples include the halting of the Colorado Department of Transportation’s Camino del Rio project in Durango and scaled back construction plans for a new high school in Ascension Parish, La.
Mask mandates, one of the most common forms of protective restrictions that federal, state and local governments (as well as private businesses) can enact, have been met with significant backlash. Some contractors have enacted their own mask, testing or vaccination mandates, or followed CDC or other regional health guidelines. But others — like the Associated General Contractors of Minnesota — are lobbying against, arguing that measures like mandatory vaccines for all construction jobsite workers would “change the terms of construction contracts,” resulting in higher costs and project delays.
The pandemic has greatly impacted national trade and supply chains for contractors worldwide, which has led to significantly higher material costs that contractors are having to endure. Additionally, trade tariffs put in place during the previous administration, are affecting material supplies and pricing. The Associated General Contractors of America (AGC) is calling for an end to those tariffs to provide some needed relief.
The Takeaway: Yet again, the construction industry is having to endure painful and costly challenges brought on by the pandemic’s continued presence. And it doesn’t look like these challenges are going to go away anytime soon. Contractors are going to have to get leaner in their operations to maintain cash flow and try and grow profit margins during these difficult times. With already existing labor shortages and other industry challenges, the best way to reduce costs is actually to modernize software systems and workflows. Investing in a connected, cloud-based construction management system can reduce costly IT overhead, streamline productivity on jobsites and in the back office and provide stronger, real-time data to reduce in-the-field building errors and material waste.