This month, I was fortunate enough to speak with a group of leading contractors during a virtual roundtable, in which we discussed current industry challenges, business opportunities and expectations for 2021. The construction industry is unique, in that work is almost entirely project-based and contingent on their clients’ need to build. Work depends on the season, geographic location and several other factors—including interference from disasters much like the COVID-19 pandemic. And while business is often booming, companies from outside industries were forced to halt production and operations at the start of March, effectively reducing the need and appetite for new construction and depleting financial resources for such.
Thus, the domino effect hit this industry hard, and the construction leaders I spoke with provided transparent insight into their industry. Here’s what I learned:
Preparing for uncertainty
Despite the challenges facing this industry that hit the country unexpectantly, many contractors were able to find work with essential businesses, such as those in the medical, manufacturing, industrial and housing industries. While retail businesses were hesitant to pursue building projects, the industries that were still fully functioning required the installation of sanitizing stations, glass barriers and more. The demand for hospital building and manufacturing warehouse improvements, as well as the ongoing housing shortage, were significant at the onset of this crisis and provided contractors with a steady income.
Many of the construction leaders I spoke with mentioned that they weren’t forced to furlough employees—even if work was slower than usual, employers were still able to find projects for their staff. Now as businesses reopen and bring back their office workers at acceptable distances, office spaces are changing from an open concept to private offices, which provide contractors with renovation projects.
Changes on the home front
As the country moves toward a point of recovery, construction leaders are changing processes on their ends, too. To accommodate the expected spike in business as companies reopen, contractors realize there is a greater need to optimize their accounting and payroll processes, so that clients can pay for services from the comfort of their homes or offices. Supervisors and employers have additionally implemented rigorous training measures to educate their employees on adhering to social distancing precautions on-site and in the office, as well as meticulous cleaning procedures.
A look ahead
As businesses slowly start to reopen their doors to the public, company owners are hopeful to return to a pattern of business-as-usual. However, the COVID-19 crisis hit the country unexpectantly, and owners are approaching their reopening plans with caution for fear of a second wave and a repeat of the period of mandatory shutdowns. Many business owners, therefore, are not pursuing expansion or building opportunities, knowing the timing is not right. In addition, companies that suffered major financial losses during the shutdown may not be able to invest in building projects or renovations. Unfortunately, this leaves contractors with many uncertainties heading into the second half of the year.
As 2021 approaches, the leading contractors I talked to remained cautiously optimistic about the industry’s future, and many are still seeing significant amounts of backlog and are continuing to quote on new work. The need for construction work may have slowed down, challenging many, but there will continue to be a demand for the services provided by contractors. Thus, we look to 2021 with positive, hopeful expectations.