Nearly 40% of all contractors have canceled or delayed projects since the beginning of the crisis, as the global COVID-19 pandemics are bringing more turmoil with uncertainty in global economics. Moreover, many investors are retreating from construction project investments as a side-effect. Aside from cancellations from project owners in the construction industry, construction companies are also facing delays in deliveries of crucial materials and supplies.
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More Construction Projects Canceled During the Last Week of March
According to the latest survey conducted by the Associated General Contractors of America, more project o0wners are canceling or placing a delay on construction projects while the number has seen a significant rise in the last week of March, Since the last week, the number of canceled projects has spiked by 28%. Out of 39% of canceled projects amidst the crisis, only 18% of projects were canceled due to prohibitions by the government officials. As non-essential businesses are shutting down by the government’s orders, non-essential construction projects are also being canceled in some areas.
Shortage of Materials, Labor and Supplies Delaying Construction Projects
Up to 45% of the respondents in the survey stated that their projects have been canceled or suffering delays due to the shortage of labor, and delays in deliveries of essential construction supplies and materials. Some areas, cities and states, and New York City as well as of the latest case, have stopped all non-essential construction work. This case is additionally affecting the rate of canceled projects, sending it on a further rise.
Low Demand Taking a Toll on Construction Industry
The plunge in the economy is also taking a toll on the construction business due to the lower demand and the virus crisis. Only 8% of the US construction companies have been hired to work on remodeling or expanding hospital buildings. Working on public construction projects is still considered to be essential, which is how these types of projects are still active.
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