Type to search

Industry Updates

The Post-COVID Impact: Forecasting What’s Ahead for Construction


Although it had seemed we were approaching the recovery phase of the coronavirus pandemic, high rates of infections continue. Caution continues to be extended across all industries to minimize health risks, including the construction industry. 

While it is apparent that ramped up cleanliness and safety protocols on all job sites will represent the industry’s new operating standard, the effects of the pandemic will reach further into the future as the construction industry moves forward. Recovery and demand will differ by sector, while labor shortages and a growing reliance on technology will have long-lasting impacts. No one can predict what next year will bring, but we can assess a few key trends on the rise in construction due to COVID-19.

Sector by Sector Recovery and Demand

The pandemic has stimulated projects in certain sectors while leaving others stalled. With more demand on medical services and the ongoing search for COVID-19 treatments, any construction work related to pharmaceuticals will continue to be robust, though in some of the large U.S. metropolitan areas, the healthcare sector has unexpectedly been negatively impacted by the redirection of resources to meet emergency responses to the pandemic.

On the other side, hard-hit industries like entertainment, retail and hospitality will continue to struggle due to lack of demand. Large crowds found at live shows and in shopping malls are simply unappealing right now. This is the reason why big names like Madison Square Garden Entertainment have suspended such high profile projects as MSG Sphere in Las Vegas, noting it will not open as expected in 2021.

Retail sales recently enjoyed an increase of 7.5% in June, after a record 18.2% rise in May. But air travel has seen a disruption, with only 4.65 million people passing through checkpoints at U.S. airports in the week ended July 19th. This was down more than 4% from a week earlier and the first weekly percentage drop since the month of April. The U.S. hotel industry also has faired poorly, with STR reporting that the business suffered its worst quarter on record during the second quarter of 2020.

Labor Shortages

Other areas in which project demand is expected to increase are those related to supply chains and manufacturing. With borders closed, local access to supplies is critical, which translates to more distribution, warehouse and manufacturing facilities being built within the United States. A move away from relying on building products from China, which supplied approximately 30% of the States’ building materials in 2019, also means that the construction industry can expect to see more activity in manufacturing and supply chain infrastructure.

Contractors and developers are still finding it challenging to fill skilled trade roles in the United States. What has been a trend leading up to the pandemic has only worsened, with 80% of contractors reporting that they cannot fill positions and 44% of those contractors forced to raise prices. This could be due in part to some workers relying on expanded unemployment benefits from the CARES Act, making them reluctant to return to the job site.

Others are simply worried about the risks of becoming infected with COVID-19, or they must juggle responsibilities at home. In the long term, extended delays due to pandemic shutdowns and more intensive safety regulations, like limits on the number of workers on site at once, will reduce the pool of available laborers for future projects even further. These new challenges in prolonged schedules will call for better project planning and understanding of realistic completion timelines. 

The Role of Technology 

Another way in which the labor shortage can be addressed is through the implementation of new technology. Artificial intelligence (AI) can automate specific labor-intensive tasks, which enables workers to use their skills and focus on more complex duties. Companies like Build Robotics are taking the lead by developing a system that is guided by AI to operate heavy machinery, like excavators and bulldozers, without the need for a human operator.  

Technology is also enhancing workflow efficiency. According to McKinsey, 4-D and 5-D simulations are being used to improve the scheduling of workers and shipments. Virtual tours also offer stakeholders more visibility to monitor progress remotely, while video conferencing tools help on and off-site teams coordinate and communicate better. Three-hundred-and-sixty-degree cameras on sites can feed new digital platforms the information needed to stitch together composites or “digital twins” of construction sites. This helps project managers see issues in real-time before they get worse— and without ever needing to be physically on the site.

The use of remote technology and other innovations also support new health and safety guidelines. For on-site personnel, physical distancing measures are being enforced by wearable devices and AI sensors. They determine when a worker is not maintaining a safe distance from others or if the limit to the number of people that can safely be in a workspace has been reached. With so many advancements in AI and technology, the construction industry can expect to see new software and platforms that are promoting speed and efficiency to remain well after the global health crisis has subsided.

Wider Adoption of Modular

The benefits of speed and control are also reasons why there will be more widespread adoption of modular building techniques. From 2015 to 2018, the market share of permanent modular construction in North American real estate increased by 50%. And though the modular approach has been used by several large contractors for years, it will appeal to more developers and contractors post-COVID.

Having components of a build assembled offsite allows for greater control on the environment and increased safety for workers. The factory setting of modular construction also promotes physical distancing by allowing for more oversight in reducing the number of trade personnel in one place at any given time.

Assessing the COVID-19 Impact

While COVID-19 will leave a lasting mark on all aspects of life and work, for construction, it is about treading into new territory and adapting to previously unseen challenges. New sector demands will improve some markets and leave others stagnant, while labor issues will continue to affect project timelines. Such trends will also drive innovation in an industry that has been previously reluctant to change. If there is one bright spot to the pandemic, it is the fact that better collaboration and the growing use of technology to increase speed and efficiency will continue to propel construction forward.

Patrick Ryan is the executive vice president of US East at Linesight, a multinational construction consultancy firm. 


You Might also Like