Construction and COVID-19: Short- and Long-term Impacts

Originally published by Henry D'Esposito on September 24, 2020.

In 2019, private construction spending had slowed in the U.S. for the first time since the last recession. Then, at the beginning of 2020, construction was growing at a slow, steady pace. Suddenly, the COVID-19 pandemic hit, creating instability across markets and property types.

Even in cities and states where construction was not shut down because of the pandemic, stay-at-home orders created challenges for operating building sites. From March to June, those shutdowns and stay-at-home mandates covered most of the U.S. and impacted a large majority of job sites. Infection rates and varying government responses were the primary cause of slowing construction, and whether or not a market was forced to shut down, construction had a large impact on spending. Of the seven states that issued a shutdown order, the average length of those shutdowns was 41 days. And while the long-term effects in markets with shutdowns are not expected to be severe, work levels remained lower in those markets even after construction resumed, as opposed to markets that did not shut down.

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