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While the construction industry has weathered the coronavirus (COVID-19) pandemic better than others like retail and hospitality, it hasn’t been all kittens and rainbows either. From February through April, the construction industry lost over a million jobs. To put that in perspective, during the Great Recession the industry lost about 2.3 million jobs. Through June, the industry has managed to gain back over 600,000 jobs.
Construction starts and put-in-place spending have also taken a hit since state lockdowns and shelter in place orders started rolling in back in March. While there were a handful of state and local governments that deemed construction nonessential, many allowed construction work to continue, and now all jobsites have been allowed to resume operations, many with restrictions and guidelines on social distancing, mask wearing, and other safety protocols in place.
While construction being allowed to resume may seem like good news, it doesn’t paint a full picture of where the industry currently stands. The economic downturn caused by the pandemic is causing owners and developers to hold off on moving forward with new construction projects. Many states are still in the process of reopening and the increase in the daily number of new coronavirus cases are causing some to pause or reverse their reopening plans.
Because of this, and until there’s a widely available COVID-19 vaccine, it’s impossible to say when things will get back to normal for the construction industry, or what the new normal will look like. Changes to the industry will have to be made and some of those will be for the better. Here’s a look at some of the ways COVID-19 might shape the future of construction.
Construction Technology Adoption
Despite the growing number of construction technology startups over the past few years, adoption and implementation in the construction industry has remained low. Due to the coronavirus, many contractors have turned to technology to keep projects moving, monitor and screen workers on the jobsite, and communicate and collaborate with stakeholders.
Building Information Modeling and virtual reality will allow owners, architects, engineers, and contractors to better visualize projects before and during construction. Drones, thermal cameras, and wearables can be used to monitor workers, looking for signs of illness and to ensure social distancing practices as well as performing other jobsite inspections. Digital bid boards, bidding software, and collaborative takeoff and estimating tools will allow estimators and project managers to take control of their project pipelines and work together remotely.
Project management software will allow project managers to keep construction projects on schedule and update everyone, whether they’re in the office or out on the jobsite. Construction robots and autonomous and semi-autonomous construction equipment will supplement and aid workers to allow them to increase productivity on jobsites.
The list of applications and benefits of construction technology goes on and on. The construction industry is due for a true technology revolution and the pandemic may be the catalyst needed to get it going.
Off-Site & Modular Construction
Because of the pandemic, many construction sites are either being required to limit the number of people on the jobsite or doing it on their own in order to limit the spread of COVID-19. This is causing longer construction times with only one or two trades being allowed to work on a project at a time to maintain social distancing among workers.
Performing construction off-site in a climate-controlled environment would allow work to continue around the clock in shifts. The streamlined, assembly line process used in off-site and modular construction, along with to continue work regardless of foul weather, allows construction to be completed in a fraction of the time compared to conventional construction methods.
Off-site and modular construction is also a great option once recovery begins, especially if there is a sudden escalation for demand of certain types of buildings like hospitals, schools, hotels, office buildings, dormitories, etc.
Pandemic-Specific Contract Clauses
There has been a lot of discussion over force majeure clauses in construction contract and whether or not they apply to the COVID-19 pandemic. Force majeure clauses are in place to limit liability caused by unforeseen circumstances or events outside the control of the parties involved that results in construction projects to be delayed or cancelled.
Depending on the exact language of the clause and the specific circumstances involved, force majeure clauses may or may not apply to the coronavirus pandemic. Going forward, it’s likely that construction contracts will either start including a COVID-19 or pandemic-specific clause that tackles liability in the midst of a major health crisis in the future.
Safer, Cleaner Construction Sites
The construction industry, as a whole, has never been known for its stellar safety track record. Each year, construction leads the way in workplace fatalities as well as having a large number of injuries from jobsite accidents.
Fewer workers on construction sites at a time will make it easier for safety managers, foremen, and site superintendents to monitor workers and ensure that not only are all COVID-19 safety guidelines are being followed but also all other safety rules are regulations.
At least until the virus is gone, we’ll probably see an increased vigilance on cleaning, sanitizing, and disinfection on construction sites. This along with regular handwashing will help to reduce the spread of COVID-19 along with other viral and bacterial infections that can be easily spread on construction sites.
Much like changes to construction contracts, COVID-19 will also force safety managers to include training and additions to their safety programs and site-specific safety plans to deal with future outbreaks or pandemics.
Shifting Market Trends and More Competition
In a healthy economy, construction activity across all verticals tends to be strong. Because of the pandemic, demand for certain types of projects has dropped dramatically while others have seen increases. Because of the shelter in place orders that shuttered many businesses in an attempt to flatten the curve of new cases of coronavirus demand for new retail buildings, movie theaters, hotels, restaurants, etc. have been down while roads, highways, and bridges, sewer and water, and others have increased over the past year.
These fluctuations and uncertainty are causing contractors to keep a closer eye on market trends and adjust their bidding and job procurement strategies. Construction firms that specialize in one or two building types are going to have to broaden their preferences and be a little less picky in the types of projects they pursue. Contractors that focus solely on public work may have to start looking at private projects and vice versa.
The competition for these projects will also get tougher as more contractors are bidding on fewer projects. This will force contractors to be more diligent in their bid/no-bid process as well as ensuring their takeoffs and estimates are accurate so they can focus on pursuing profitable projects and maintaining their bid-hit ratio. It might also lead to contractors adopting new project management methods, such as lean construction, to ensure the projects they do win are delivered on time and within budget.
Final Thoughts
This isn’t the year any of us expected. The pandemic threw everyone for a loop, and some have adjusted and quicker and better than others. While we’re still a long way from seeing the light at the end of the tunnel, with proper planning, modifications, and adjustments, the construction industry can come out the other side stronger and more resilient than ever before.
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