Construction and COVID-19: The State of the Industry and Future Trends


Before the pandemic hit in March 2020, the construction industry was strong. Total project starts were steadily increasing each year and the unemployment rate was dropping. Then, COVID-19 abruptly changed everything.

From construction shutdowns to building site safety and employment-related issues, contractors faced new and challenging obstacles. After COVID-19 was declared a national emergency on March 13, 2020, states put lockdown measures in place to limit the spread of infection. This had a devastating effect on the construction industry.

Total construction starts fell 10% in 2020 to $766.3 billion. A month into the pandemic, nearly 40$ of construction firms reported layoffs and 56% said they applied for the Paycheck Protection Program. The unemployment rate more than doubled from March 2020 to April 2020, with more than 1 million contractors losing their jobs in the same time frame.

As contractors dealt with less work, they also had to focus on their workers’ health and safety. Although already an industry priority, it added time and expenses for contractors. In fact, employers spend an average of $5,200 per employee on COVID-19 related safety practices.

As the pandemic continues, emerging trends are starting based on how contractors responded to COVID-19.

How Contractors Reacted to COVID-19

Contractors had to react quickly to the pandemic, requiring flexibility and urgency on construction sites and projects.

An ongoing challenge contractors continue to deal with is infection prevention. During the early days of the pandemic, public health guidelines and recommendations continued to change at a fast rate as medical professionals learned more about COVID-19. Unless interactions were completely eliminated between workers, the evolving guidance made it hard for contractors to ma nage the risk of infection and keep their team safe.

Since the start of the pandemic, contractors followed the same principles as other businesses:

  • Establishing health screenings
  • Creating staggered work  hours
  • Reducing face-to-face meetings
  • Using physical barriers
  • Following social distancing guidelines
  • Requiring personal protective equipment (PPE)
  • Cleaning and disinfecting commonly touched surfaces
  • Developing isolation and quarantine procedures

Employment in the Construction Industry: Tough Competition

Despite a decrease in employment from March to April 2020, jobs in the construction remained steady. But the pandemic has revealed a few emerging trends within the industry as it relates to employment.

Before the pandemic, 81% of construction businesses reported having a hard time finding skilled labor for current projects and open positions. Although many construction businesses had to lay off workers in the last year, some contractors viewed the pandemic as an opportunity. Because of the layoffs there was a pool of skilled construction workers ready to work. However, in a post-COVID world, it won’t always be this easy to find skilled workers.

As vaccines become more available, the construction industry is optimistic that employment and project starts will increase, but finding skilled workers will likely be difficult.

Many experienced workers have retired or left the industry. And because of the number of economic, labor supply and technological advances, it’s expected that physical tasks will decline over the next decade. For example, modular and prefabricated construction is becoming more common. This work can happen in a factory environment with automated tasks.

When you consider these factors, finding skilled workers will continue to be hard for contractors as businesses compete to get the best talent.

Improving Injury Rates in Construction

The construction industry’s injury rate has been slowly decreasing over the few years. According to the most recent data from the U.S. Bureau of Labor Statistics (BLS), the incident rate for construction businesses in 2019 was 2.8 per 100 full-time workers. This is better than the rate in 2018 and 2017.

BLS hasn’t released data for 2020 yet, but with contractors taking even more of a focused approach to worker safety, it’s expected that this trend of improvement will continue.

“There’s not an easy answer as to why the construction industry’s incident rate has been improving over the last few years,” said Toby Cushing, Head of Construction at The Hartford. “But, the focus on preventing the behaviors that lead to injuries and better safety equipment and training are probably factors behind the improvement.”

For example, digital design technology can streamline the production process and lead to improved job safety planning and workforce management. Contractors can also use digital communication tools to share information, as well as participate in virtual and onsite safety training.

More contractors are starting to use smart technology to improve worker safety, as well. This includes;

  • Sensors that monitor and alert workers about dangerous environmental conditions, such as particulates and carbon monoxide.
  • Anti-collision devices on business vehicles to help prevent accidents.
  • Wearable devices that can help develop ergonomic solutions and prevent workplace injuries.
  • Cameras combined with artificial intelligence to help contractors take a proactive approach to reducing risks.

The Hartford has a dedicated Internet of Thing (IoT) team that works with clients to use these kinds of devices. As more contractors adopt this strategy, it’s another factor that will reduce injuries in construction.

“It’s clear the pandemic will leave its mark on the construction industry,” said Mike Briggs, Senior Managing Director of Construction Risk Engineering at the Hartford. It’s possible that COVID-19 will add to the construction labor shortage that existed before the pandemic. And with the contractors continuing to put a priority on worker safety and embracing technology, inquiry rates should continue to improve.”

Article By: The Hartford Staff

Source: The Hartford