By Patrick Ryan, Executive Vice President, US East, Linesight
Since the first cases were detected in November 2019, the novel coronavirus has spread and affected every major industry in the world. One of the many industries facing extreme challenges right now is construction. In a recent industry survey conducted amongst CEOs of U.S. construction firms and designers, almost 60 percent of respondents noted project completion impacts, with two-thirds of those reporting delays of one to three months, and almost 20 percent mentioning schedules extended by at least six months, or indefinitely.
These delays also impact project budgets, and with the expected recession, financing for construction projects is expected to suffer. No one can predict what the world will look like post-pandemic, but there is no doubt that prolonged project delays will cause major disruptions in the U.S. construction pipeline. As in many cities across the country, businesses in New York are seeing phased reopenings. And it is here in New York where we can begin to examine the long-lasting changes in how the construction industry is working through its post-COVID reality.
Health and safety priorities
During the early days of the outbreak in the U.S., increased focus on health and safety on the job site inspired a newfound willingness to collaborate among stakeholders, especially in sharing information about how to keep workers safe on-site. Contractors traded best practices over conference calls and webinars. Organizations like the Associated General Contractors of America and the Associated Builders and Contractors stepped up to provide educational materials and safety guidelines for ongoing work. The cooperation between trade associations, contractors and owners within the industry has been crucial in effectively responding to the rapidly evolving status of projects. It is also a sign of a better, more collaborative approach to sharing best practices that could carry through long after COVID cases decline.
As New York slowly makes more definitive moves to restarting its economy, the construction industry has had to continue adapting to new guidelines necessitated by the virus. Upholding health and safety naturally remains a chief concern. Disinfecting tools, not usually done on sites before the pandemic, is now a common practice, as is wearing personal protective equipment (PPE) even during breaks. Hand-washing stations are more prevalent, as are city building inspectors, who now regularly visit sites unannounced to check that safety measures like physical distancing are observed. In an industry that has not always been associated with clean workplaces, maintaining high health standards that deter the spread of the coronavirus has dramatically changed the face of job sites.
Another byproduct of the pandemic has been the direct cooperation between construction unions and contractors. This has resulted in two important shifts in construction culture. The first is one where labor unions and contractors are urging workers to be mindful of how they are feeling. If someone on the site is not feeling well, that person is asked to stay home to prevent getting others sick. This is a drastic change from more traditional construction attitudes of “working through” illnesses.
The second shift applies particularly to New York’s construction schedules. Since the city only allows construction work to be done between 7 a.m. and 6 p.m. on weekdays (excluding projects with special permits), unions and contractors have been working together on a plan to enable 24-hour work on specific projects. Not only is this meant to jumpstart a crippled economy, but it would also promote on-site social distancing, as extended hours would allow for smaller groups to work at any given time.
There is no crystal ball to predict life after COVID, but most experts in construction agree that the pandemic has forever altered the way the industry will work. For instance, with delayed schedules and the impact of a global recession, the costs of existing projects will increase. This will result in a greater focus on managing costs, as financers and owners pay closer attention to how construction companies stay within their budgets.
Reliance on international supplies and workers will also need to be reassessed as projects restart. With conservative estimates stating that nearly 30 percent of all U.S. building products are imported from China, supply chains were one of the first areas of construction that were impacted. As the U.S. economy becomes more active, borders may not open at the same speed. This could leave supply chains severely delayed and international workers unable to re-enter the U.S. All states will need to rely on local workers, suppliers and contractors to ensure that projects can move ahead once sites are reopened. Hiring and buying locally is also pivotal for stimulating the economy—a fact that all industries will need to consider going forward.
All industries have touted the benefits of technology throughout the pandemic, and this reliance will continue within the construction industry. Construction has always been a manual process, relying on laborers to complete projects. The pandemic has shown the fragility of relying on labor. With social distancing measures likely to remain implemented as businesses reopen, technology will be instrumental to reduce on-site density and increase communication between contractors and clients. Automation and robotics have already started to be implemented on some sites, but they will become even more widespread to increase the speed of completion for projects. Offsite or modular construction can also benefit projects, as it reduces the number of workers on-site at one time. To ensure projects stay on schedule, the adoption of 3D room scanning and autonomous vehicles can help facilitate virtual walkthroughs and capture job site images.
Construction recovery will differ greatly between sectors. Health care, pharmaceuticals and data centers have been in high demand throughout the pandemic, with site closures relating mostly to stay-at-home orders. Once more sites reopen, these industries can expect a relatively normal construction schedule. On the other hand, the hospitality and retail industries have been hit hard by the pandemic. The possibility of continued border closures will cause the hospitality industry to recover slowly, with project cancellations to be expected. Commercial property is one area where the impact is hard to determine. As many businesses become used to flexible or remote working options, there may be less demand for commercial construction projects.
More information is released daily on how the pandemic is affecting the economy and what can be expected as businesses prepare to reopen. Keeping up to date on new guidance and regulations will be crucial for businesses as they plan to restart. While the spread of COVID-19 has created a fluid situation full of unknowns, post-pandemic, there are a few areas of constructions that will no longer be “nice to have.” Excellent management, defined safety processes and increased stakeholder collaboration will become requirements as the construction industry considers how it will move forward in the post-COVID landscape.
Patrick Ryan is the executive vice-president, US East, at Linesight, a multinational construction consultancy firm. He has more than 23 years of experience in the delivery of large complex construction and real estate developments across Europe, the Middle East, and the United States.