The industry of construction has already recorded nearly 1 million lost jobs at the end of the first quarter of 2020. The severe drop rate in the number of jobs in construction is most definitely the result of the ongoing but receding fallout of COVID19. Even though many construction sites around the globe and in the US are resuming operations with “slight” changes with protection guidelines against COVID19, contractors are fearing that the rest of the year and 2o21 would be difficult for the construction business.
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Contractors Predict Declining Demand in 2020 and 2021 for Construction
According to the Wall Street Journal, contractors expect to see a serious decline in demand for construction projects. The reason behind the decline would be the result of retreating investors, banks, developers, and property owners. Contractors seem to be certain that there should be another severe decline in jobs in construction in the following 18 months as a consequence of recording lowered demand. As emphasized, the decline in construction would also have a negative impact that depends on the industry of construction. That is how manufacturers, suppliers of construction tools, supplies, and materials, as well as machinery dealers, could also experience difficulties in terms of lowered demand and declining profits.
Banks Cutting on Loans, Projects Cancelled or Postponed
Certain banks already retreated from providing loans for construction businesses, while many project owners and contractors are either canceling projects altogether or postponing projects for the next six to twelve months. American Institute of Architects also reported declines in the monthly billings index. The billings dropped to the lowest point in March 2020. The demand for construction equipment is also sinking in terms of demand, while Caterpillar Inc. recorded a 27% decline in sales in the first quarter of 2020.
