State by state, non-essential business employees are beginning to show up to the workplace again, signs the economy will begin moving ahead amid fears of a second wave of infections. While some businesses and industries seemed to weather the storm better than most, such as healthcare, grocery retailers, certain eRetailers, construction has been subject to a much more local status fate, with national acknowledgement of construction as an essential business, and certain state and local municipalities putting stifling restrictions on the types of construction deemed essential.
Supply vs. Demand of Construction
With government involvement influencing supply through “essential” and “non-essential” designations for construction, the supply of construction during the past two-and-a-half months has created shortages in certain markets, and until recently, a balanced supply-demand in others. However, due to the economic fallout from the coronavirus pandemic, projects across the nation are being delayed and in some instances cancelled, creating a surplus of supply as demand for new projects dwindles. The Associated General Contractors of America (AGC) reports that nearly 1 million construction jobs were lost in the month of April—a time of the year where builders tend to hire on additional labor to meet the season’s surge. Grim news for an industry that has weathered economic storms in the past.
Could The Construction Downturn Turn Around Soon?
While powerhouse states like California struggle to find balance between health and economic recovery, some voices in media are suggesting that June will prove most states are ready to move ahead to re-open businesses, and further economic stimulus continues to be debated in congress. With more businesses innovating, manufacturing, and selling, a healthy recovery plan state-by-state just may signal new opportunities and optimism for the construction industry, new projects are on the horizon, halted projects will resume, and construction workers will once again be able to return to job sites across the nation.
Preparation For A New Wave Of Construction Projects
Particularly true of public works projects, a year’s profitability is determined within the first 2-4 months of the calendar year, with the bulk of infrastructure and major building projects launching in the spring and early summer months. With the substantial delay due to the pandemic, we may be looking at a later start to many building projects, creating a need for available capital to acquire equipment and cover operating expenses. At ENGS, we specialize in helping construction companies finance equipment, insure equipment, and have cash flow solutions to help with operating expenses and demand surges. Give ENGS a call or visit us on the Web to learn how we can help your construction company move forward.