- The USG + U.S. Chamber of Commerce Commercial Construction Index plummeted from 74 to 56 from the first to second quarter of 2020. Confidence scores for new business and revenue expectations dropped by 26 points each, to 50 and 44, respectively, but the backlog score only dropped 3 points.
- Officials said that the overall index drop is likely attributed to only 16% of contractors surveyed having high confidence in new business opportunities within the next 12 months, compared to 54% in Q1.
- Despite this, three out of four contractors surveyed said they have moderate-to-high confidence that the next year will bring sufficient new business opportunities despite any long-term impact from the coronavirus.
When the survey was conducted in April, coronavirus-related shutdowns were in the early stages. Nearly nine in 10 respondents said they were experiencing delays, 87% expected the delays to continue through the summer and 73% anticipated the delays to continue through the fall.
“Even as most construction has been deemed essential during the last few months, the loss of new projects and revenue has been severe. This industry is key to our economy, representing 3 million American jobs and $700 billion in spending," said Christopher Griffin, president and CEO of USG Corp., in a press release. “We’re watching closely signs of improvement, as commercial construction can serve as a bellwether for other economic development and recovery.”
The disconnect in contractor confidence for the future may be due in part to the slight drop in backlog, as 60% of those surveyed said they had at least a six-month backlog in Q2, compared to 69% in Q1.
At the same time, contractors remain confident about their ability to keep workers employed. Nearly a third of respondents said they plan to hire more workers in the next six months, while 48% said they believe the workforce will stay around the same. Only 15% said they expect to have fewer employees.
Contractors’ other top concerns were worker health and increased worker shortages. Of those surveyed, 92% said they changed procedures to better allow for social distancing.
Last week, Associated General Contractors of America and Procore released data that indicated that the impact from COVID-19 shutdowns had begun to let up. Using worker hours to measure productivity, Procore found that in many major cities, productivity is returning to pre-March numbers.
“No industry has been immune to the devastating impact of COVID-19,” said Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer, in the press release. “However, the commercial construction industry appears poised for a quick recovery and a return to growth. This is good news for the economy and the millions of Americans who work in the industry.