At the end of July, The Sheet Metal and Air Conditioning Contractors’ National Association published a report on the impacts of Covid-19 in the construction industry. To no one’s surprise, the pandemic has had a major impact on profits, both in terms of direct and indirect impacts. Here at Construction Guide, we’re using this information to understand how to best support our network to ensure the continued success of our projects, both present and future.
One of the most significant areas is virus mitigation. By this, we mean the extra measures drafted to help ensure the on-site safety of workers. Things such as varying employees’ hours, assigning working “bubbles” and extra sanitation have reduced productivity by a staggering 17.9%, and project profits have taken a negative hit of 7%.
What’s more, many live projects have taken a downturn because of indirect impacts. Although many employees are ready to resume work with new measures in place, the weakening economy (both national and global) has stalled this for now. As many people face redundancy, there is currently an oversupply of construction employees, many of whom are unable to find new work. And those that can find work have to get by on lower wages caused by this oversupply. Combine this with disruptions in supply chains, which result in higher material prices, and it’s easy to see why this is a difficult situation.
SMACNA conducted their study alongside ELECTRI International, a National Electrical Contractors Association research group. Together they surveyed a total of 112,000 hours of their workers’ time between January and May of this year.
The study found that, on average, each employee was losing 85 minutes from their 8-hour working day because of new mitigation measures. These include things like hand washing and social distancing. However, the report also found that knock-on effects, such as anxiety and exhaustion, have led to a 9.2% drop in productivity across the board. The report concludes by stating that these lost profits could take at least 6 months to recover, although this will of course be dependent on an upturn in projects.
In a similar pattern, the American Institute of Architects’ Billings Index reported a similar drop in their figures for June. However, compared to May, which saw a massive drop in services, June showed some level of stabilization, hopefully implying that things will continue to even out, and possibly take an upward turn.
It’s worth noting with SMACNA’s survey that the results might be slightly skewed because they began at the beginning of the pandemic. It’s fair to assume that the first 2 months would have had more of a significant impact on productivity than later months. However, this will only become evident as time goes on and workers hopefully adjust to these new patterns.
We at Construction Guide share the industry-wide concern about these productivity trends. However, we are making every effort to ensure projects are still as successful as possible for real estate developers and private clients via our dedicated vetting process. We use this to make sure that all consultants we recommend are still delivering quality work in line with safety recommendations.
We’re also still helping our consultants to maintain a healthy flow of work in NYC, the Hamptons, Alpine, NJ, Greenwich, CT and Miami, FL. Our teams work with information such as the SMACNA report to understand how best to adapt our strategies to ensure consistent quality and safety.
Considering this virus does not appear to be going away any time soon, many construction firms may have to compromise a portion of their profits to ensure the continued safety of their workers. However, as time goes on, we can only hope that more streamlined processes are introduced to make up for this significant and damaging loss.