SMU Community Chat
April 30, 2020
Construction Faces Stiff Headwinds from Pandemic and Recession
Written by Sandy Williams
Ken Simonson, self-proclaimed optimist and chief economist for the Associated General Contractors of America, offered a fairly pessimistic forecast for the construction sector during Wednesday’s SMU Community Chat. Real GDP fell 4.8 percent in the first quarter due to the coronavirus shutdowns, he said, the worst quarterly contraction since 2008. “I consider myself an incurable optimist, but not in this case. To see this steep a drop for an event that basically hit in the last three weeks of March is shocking and ominous.”
Half of the contractors responding to AGC surveys have had current projects halted by an owner, governor or mayor, while 28 percent reported future project cancellations. Disruptions and delays are growing steadily, with firms reporting PPE shortages, delays in deliveries of construction materials, equipment and parts, and a shortage of craftworkers. In the latest survey, 49 percent of suppliers said they have received notices that deliveries would be late or canceled.
