*Editor’s note – please check back regularly, as our Building & Construction team will be updating this article with the latest insights on the impact of COVID-19 to the residential, non-residential, and infrastructure sectors. For questions or to speak directly with a Building & Construction expert, please email email@example.com.
The novel coronavirus (COVID-19) has not yet showed signs of slowing down in North America, causing major disruptions as cities and states halt business operations across industries, primarily in the global automotive space. The construction industry, however, still sees some pockets of opportunities as many construction sites continue to operate and we see a temporary spike in healthcare construction.
We are constantly monitoring rapidly changing developments surrounding COVID-19 to separate signal from noise and provide the most important insights for your business, now with a centralized hub for all of our analysis.
DuckerFrontier’s Building & Construction experts are keeping track of the latest COVID-19 developments and their impacts on the global automotive industry. Below our experts outline some opportunities and concerns in the construction industry as you navigate continued uncertainty surrounding COVID-19.
- Good Inventory supply: Many North American construction firms use suppliers that are based in Asia and have struggled to maintain adequate supply as many factories in China were shut down for several weeks. However, winter and spring buying activities were high this year and replenished supply is likely already in route to North America as Chinese factories reopen.
- Most construction deemed Essential by Government: Many state governments across the U.S. are sparing construction sites that are deemed “critical” or “essential” projects like infrastructure, hospitals, and some limited housing projects. With support from the government and major associations, many industry players are optimistic that activity will remain strong.
- Shift to affordable housing favors rental communities, multifamily construction: With urban areas already hitting peak multifamily inventories, suburban and rural low/mid-rise will likely outperform. Further, virus implications favor shift away from high density living with access to more open environments.
- Demand slowdown: Although “critical” construction (infrastructure and many non-residential projects) is holding strong while other industries are seeing major disruptions, demand slowdown in the medium-term remains a large concern as the overall United States economy continues to lag.
- Unemployment: In the short term, construction unemployment is spiking. This concern hits two-fold; employees are unable to work as residential and “non-essential” projects are halted indefinitely, and many workers at active sites have contracted COVID-19 and are unable to report to work. However, the biggest impact is the unemployment impact to financial health and affordability for home ownership down payments – likely reducing purchases and ownership for a while.
DuckerFrontier’s Building & Construction team is at the forefront of key trends impacting the industry amid COVID-19 disruptions. Visit our COVID-19 Resource Hub for the latest insights and implications for global business, or contact us to connect with a team member.