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Mounting job cancellations giving contractors cause for concern

The nation’s contractors are growing concerned as shrinking demand and disrupted operations drag down business.

A new survey from the Associated General Contractors of America released today reveals that three-quarters of contractors report having a scheduled project postponed or canceled.

The numbers are up from the 60 percent of contractors who reported a canceled project in August and 32 percent who did so in June.

Meanwhile, only 23 percent of contractors report working on new or expanded construction projects as a result of the pandemic, about the same percentage as in June.

“The survey results make it clear that the months-long pandemic is undermining demand for projects, disrupting vital supply chains and clouding the industry’s outlook,” said Ken Simonson, the association’s chief economist.

KEN SIMONSON

“Without new federal relief measures, these challenges pose a significant threat to current construction employment levels.”

The coronavirus is also disrupting projects that are still underway, Simonson noted.

Seventy-eight percent of respondents report they are currently experiencing project delays or disruptions, up from 57 percent in June.

 In particular, 42 percent of firms are experiencing disruptions due to a shortage of construction materials, equipment or parts. In addition, 35 percent are experiencing disruptions because of a shortage of craftworkers and/or subcontractors.

 In one bit of good news, however, only seven percent of firms are experiencing disruptions because of a shortage of personal protective equipment.

Thirty-four percent of respondents report they do not expect their firm’s volume of business will return to pre-pandemic levels for at least a year.

According to the report, 30 percent of firms have already furloughed or terminated employees because of the coronavirus.

New York City has lost 19,500 construction jobs in the last 12 months, according to the AGC, second only to Houston, TX, where 24,400 jobs have been shed.  Other hard hit areas include Brockton, Mass. followed by Altoona, Pa.

According to Simonson, a majority of firms plan to cut jobs or abstain from adding new employees during the coming year.

Most firms who took part in the survey are looking for new federal relief measures to mitigate against the impacts of the coronavirus.

Among the measures firms are hoping Washington officials will enact are new federal investments in infrastructure, liability reforms that protect responsible firms from frivolous coronavirus suits and a new highway and transportation bill.

STEPHEN SANDHERR

Association officials have urged Congressional leaders to recall legislators right after the election to pass new coronavirus relief measures. In particular, the construction officials called on Congress to back  new infrastructure investments, liability reforms and an additional round of Paycheck Protection Program loans.

“As our survey shows, the pandemic and efforts to mitigate its spread have deeply wounded the economy, depressing demand for many types of commercial construction projects,” said Stephen E. Sandherr, the association’s chief executive officer.

“Congress can end the downward economic slide and help create needed new construction jobs by passing measures to boost demand and protect honest employers.”

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