The experts are predicting the Coronavirus (COVID-19) will have long-term ramifications for many aspects of the U.S. construction industry. Like all predictions, we will not see the actual effects until after the event passes.
As leaders of construction companies, your employees are looking to you for guidance throughout this latest crisis. It is prudent to be prepared and have a strategic plan in place for the remainder of the year to identify and overcome the unforeseen and unplanned effects on construction this year from the outbreak.
Regardless of the uncertainty, the pandemic will have consequences for several facets of our industry. Some items that will have the most influence on your operations are listed below:
Overall Health and Safety
The CDC has recently released guidelines for businesses and employers. The recommended strategies they cover as of March 15, 2020, are:
- Actively encourage sick employees to stay home
- Separate sick employees
- Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
- Perform routine environmental cleaning
- Advise employees before traveling to take certain steps
- Additional Measures in Response to Currently Occurring Sporadic Importations of the COVID-19
Please go the following website for the detailed topic information, as well as any current updates by the CDC: https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html
In addition to physical health concerns, there are also mental health issues to consider. Employers across the country are reporting employee anxiety over the uncertainly of the situation.
As of late, there have only been a few reports of the virus directly impacting the construction workforce. As emergency protocols within affected communities, quarantines, school closures, and possible domestic travel bans, many employees could find it difficult or impossible to come into work.
Currently, we have not seen any noticeable delays except on the West Coast of the U.S. or significant price spikes. Still, because over 30% of all construction building materials are supplied from China, it is likely we will see loss of production capabilities from the shutdowns. According to Richard Branch, Dodge Data & Analytics chief economist in a recent interview, “for commercial builders that rely on Chinese-made goods or materials, this could mean higher material costs and potentially slower project completions.”
On the domestic front, we do not know what if any impacts will be felt if quarantines and shutdowns increase in the distribution hubs of our country.
Project Delays, Shutdowns, and Cancelations
Some of our clients have informed us that their projects are shutting down until the uncertainty of the virus passes. Others have reported project owners requiring construction workers to be tested before returning onto the construction sites to resume their work.
One of the most destructive outcome scenarios of the COVID-19 outbreak would be if lenders and construction clients get panicked and construction financing dries up. If this were to happen, many new and currently planned projects might be tabled by owners until the uncertainty passes.
Some Steps to Prepare Now
Even though a considerable amount of information remains to be seen, now is the time for the construction industry to prepare for COVID-19’s impact.
Steps you can take:
- As you would with any other safety measure, remind employees how to minimize risk on the job site.
- Cross-train employees to fill in on other functions and duties in preparation for increased absenteeism.
- You can encourage and assist employees in developing contingency plans for any childcare that may be required with the continued and potentially lengthy school and childcare closures.
- Communicate potential impacts on schedules to your clients. You do not want to be reactive with your clients; proactive communication of facts and potential schedule delays are always better received by the end-user of your services.
Continue to stay vigilant in your efforts. With all of the precautions being put in place by the recommendations of the Medical Health Experts, economists forecast that we should see a significant rebound in our economy once this is over and finish with a strong 2020.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.