Anirban Basu, Chief Economist at the Associated Builders and Contractors claims the most likely case is that it may take years for the economy to recover. After the blow the economy suffered due to the COVID-19 fallout, Basu noted that great pressure is placed on local and state governments across the globe and the US. Problems with budget gaps and postponed and canceled projects in construction and industries such as retail and hotel services are emerging as a consequence of the pandemics.
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Pressure and Budget Gaps Affecting Governments
Governments across the globe are faced with a lot of pressure, offering relief for businesses and industries that are suffering from the fallout of COVID-19. As the economy has experienced a major blow with social distancing and other preventive measures, governments are noting gaps in the budget – gaps that need to be balanced out with each fiscal year. As core industries are suffering, such as construction, and the tax income is on the decline, governments are also faced with major problems concerning financing.
Non-residential Construction Under a Sharp Decline
As Basu claims, even during the recession and economic turmoil, the sector of non -residential construction is usually the last segment of the industry to feel the declines. During the early stages of economic downturn, CBI usually plays the role of a shield in opposition to non-residential construction. The latest sharp decline that took place in April, however, showed that this hasn’t been the case in 2020.
Most Construction Segments Experiencing Declines
According to one of the latest surveys for the Associated Builders and Contractors members, the majority of contractors expect declines in sales in the period of the next 6 months. As ABC records further show, most construction segments are experiencing declines, including lodging, retail, office, and should continue with a downward trend in the following period.
