As the COVID-19 virus continues to circulate the globe, many industries and jobs are beginning to feel the effects of the social distancing and quarantining that most people are doing to help keep themselves safe. In some areas, complete shelter in place orders are given, which are shutting down non-essential industries, while in other areas life is proceeding as normal, but at a slower pace.
To help determine the effect of this economic slow down on the construction industry, we reached out to 35 industry experts to get their take on how their business is impacted, and what their thoughts are for the future.
Some highlights from the report include:
We’d like to extend our special thanks to all respondents for their time in answering these questions during this uncertain period.
Answers are fairly mixed from respondents about how current projects are still proceeding. Most state that things are still continuing – only 9% report that things have completely stopped at the moment. Of those who are continuing projects, 23% say that there has been no interruption at all, while 37% say that things have slowed down, and 31% say that while things are proceeding, there has been a significant interruption in their work. Given that some areas have been hit harder than others, and given that some states have enacted Shelter in Place orders while others have more flexibility, it does make sense that there is at least some interruption, even while most projects are proceeding.
Most experts report that homeowners are putting off new, planned projects, but only for a short period of time. A smaller percentage – 29% – want things to proceed as scheduled. 17% of clients are also stopping their projects indefinitely. Because things are changing rapidly still at this stage, it may be that most homeowners are optimistic about their ability to start again soon.
Material and Supply Availability
Most experts respond that they are still receiving their supplies and materials, either with a slight delay or getting everything right on time. There are currently many service alerts and interruptions scheduled by delivery firms such as UPS, and while not all construction supplies and materials are shipped the same way as other goods, it may be that slight delays are to be expected at this time.
Concern for the Future
All experts feel that the current state of the industry will impact their business in some way, with 0% answering that they have experienced no impact at all. However, the majority feels that things will return to normal soon. Only 34% report being very concerned about how this may affect their business and the state of the industry for the future.
How Do you Think the Current Crisis will Impact the Home Building/Remodeling Industry Going Forward?
When asked how they felt the current crisis would impact the home building and remodeling industry going forward, experts had very mixed answers. Most felt that this would impact the industry and economy in some way, mostly through an economic slow down. Lisa Willard from Ashley’s Building and Construction LLC (Bossier City, Louisiana) elaborates, “It may cripple our industry indefinitely. Many clients pull extra money from their stocks which have taken a huge hit. Homeowners are afraid to spend money at the moment, some wondering what will happen to their employment if this continues.”
Pierrette Tierney from Magleby Construction (Park City, Utah) agrees, stating, “ I think the fear in the market around job stability and the stock market will have a larger impact than our ability to actually keep job sites going. There are some people that are actually hoping a slow down would help with labor issues and affordability.”
The issue of labor also arose when considering what will happen when the industry begins to warm up again. Angela Cacace of A. Marie Design Build (North Carolina) explained, “Contractors will become even more overwhelmed with the demand than we already have been. The skilled trades gap will be an even larger problem because we won’t have enough workers to be able to make up for time lost.”
Many agreed that while there may be a significant slow down in the short term, there will be a boom when things return, as J. Bogard from R.E.A Homes (St. Louis, Missouri) explains, “Some projects will be cancelled, others will be significantly delayed, but 18 to 24 months out there could be a huge remodel push.” Eric A. Nelson from Trumark Homes (Newport Beach, California) adds, “In California, new home construction will slow down until things get back to normal. There will be delays for new projects, due to regulatory requirements and ability to process approvals. The end result will be more pent up demand during the eventual rebound coupled with historically low interest rates. We may see a robust market.”
Overall, the biggest take away from this is that things will slow down, at least for the time being. And while a few feel that this will remain for some time, most feel that the market will rebound with time, potentially leading to a major growth in the industry going forward.
Stay Safe and Stay Informed
Things are changing by the day in regards to the virus and its impact on all industries, including the home remodeling industry. While it does look as though the industry will experience a slowdown or recession, most experts seem confident that it will rebound with time. We urge everyone to stay safe, remain hopeful, and to keep informed as things continue to change day to day.
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