A coalition of 109 companies and organizations, representing a broad span of the construction industry, delivered a letter to the governors of Northeastern states underscoring the ability of the industry to operate safely in the face of the pandemic and the significant role the construction industry will play in leading the region’s economic recovery.
The coalition letter comes as the governors of Connecticut, Delaware, New Jersey, New York, Massachusetts, Pennsylvania, and Rhode Island are working together to deliver a plan for reopening businesses in the region following state shutdowns related to COVID-19.
The industry letter outlines five specific reasons why the construction industry plays a key role in the regional reopening plan and includes:
The construction industry has well-established safety protocols that will keep workers safe.
Construction activities can be conducted while maintaining social distancing.
The construction industry is committed to additional worker training.
Construction and construction-related manufacturing are recognized as essential in guidance issued by the U.S. Department of Homeland Security.
Construction and manufacturing will propel the economic recovery.
“Construction is one of the bedrocks of the American economy and creates millions of jobs nationwide,” said Jim Reilly, owner of Reilly Insulation in Willow Grove, PA.
“The builders, contractors, distributors, and manufacturers signed to this letter stand ready to work with these state governors and health officials to demonstrate that our industry can work safely and get this economy revitalized.”
Construction has been deemed “essential” in 16 of the top 20 markets with industrial properties under construction. Only the I-78/81 Corridor, Philadelphia, Central New Jersey, and Oakland have shut down industrial construction.
In New Jersey and Pennsylvania waivers can be granted distribution centers that will warehouse essential products.
Speculative construction projects have largely been put on hold as well, which will experts warn will create a lack of first-generation space hitting the market in 2021.
In a report from CBRE, James Breeze, senior director, Global Head of Industrial & Logistics Research, said the lack of inventory growth could lower the overall vacancy rate back to pre-COVID levels in the latter part of 2021, assuming that business activity rebounds by the end of this year.
While some construction continues, project timelines have been delayed and extended due to such challenges as completing onsite inspections, reduced construction crews due to social distancing guidelines and delays in procuring and transporting construction materials.
“Construction challenges remain in this market, but overall the pipeline is solid, showcasing the enduring demand for warehouse and distribution facilities,” said Breeze.
“Leasing activity may slow down in the near term, but a third of under construction product is already leased. Because of this strong pre-leasing, we expect to see only a moderate increase in vacancy rates in the coming quarters.“
The full construction industry letter can be viewed here.