The construction sector has been significantly affected by the COVID-19 pandemic, with both short and long-term impacts that will continue to emerge as the global economy remains locked down. According to the American Society of Civil Engineers (ASCE), major challenges for the construction sector include disruptions to supply chains and raw materials, project-related delays, owner-initiated shutdowns, shelter-in-place orders, and an uncertain legal landscape. Long-term challenges will likely include liquidity crises for construction companies with high debt and low reserves, with heavier impacts for smaller businesses and sub-contractors.
Through the month of April, many states with shelter-in-place orders placed restrictions on nonessential construction. Essential construction (public infrastructure, necessary for health and safety, etc.) remained in effect when possible. States with higher infection rates, such as New York, New Jersey, and Michigan, placed the heaviest restrictions on construction, which have not yet been lifted as of May 7. Beginning in May, other states are lifting their restrictions and are underway in their efforts to reinstate nonessential construction, including commercial and residential projects. An interactive map detailing essential and nonessential construction restrictions by state can be found here.
Pennsylvania, which reopened construction on May 1, offers the following guidelines for the sector:
- All construction businesses must adhere to applicable provisions from state public health officials, DOH, and CDC (such as PPE requirements, exposure protocols, etc.)
- Provide hand wash stations and implement sanitizing protocols
- Limit gatherings to 10 people and implement 6-foot social distancing (exempting instances like team lifting, drywalling, etc. that require deviation)
- Meet virtually whenever possible
- Stagger shifts, breaks, and work areas, and limit tool sharing
New York Gov. Cuomo has outlined a three phase plan for his state, which is the epicenter of the pandemic for the U.S, placing construction in the first phase of reopening. According to this plan, construction, manufacturing, and select retail will open first, followed by a second phase including finance, administrative, and real estate and rental industries, and a third phase with restaurants, hotels, and later arts and entertainment industries to reopen. The timeline for this plan remains ambiguous, though New York’s current stay at home order expires May 15.
In Washington state, Gov. Inslee has laid out a plan to reopen the construction sector, beginning with reinstating some work on residential and commercial projects. In order to resume work, projects must meet the following safety measures:
- Have a Safety Plan to maintain physical distancing, provide PPE, COVID-19 site supervisors, etc.
- Comprehensive COVID-10 exposure, control, and mitigation plan
- Post written notice of work to be performed for employees, subcontractors, and government officials
- Keep a safe and healthy worksite
According to Gov. Inslee, these recommendations were informed by workers, contractors, health and safety experts, and local government officials. These guidelines only apply to existing projects, meaning they must resume work in order to fulfill contract obligations effective prior to March 23, or were authorized by a government permit obtained prior to March 23.
Financial assistance is available to construction businesses through the CARES Act and other SBA Loan Programs. Additional information on SBA financial relief programs and business continuity can be accessed here.