As of October 15, the World Health Organization has reported 239,437,517 confirmed cases of COVID-19 and 4,879,235 deaths. Since the pandemic began in early 2020, the world has completely changed. Being categorized as non-essential posed a challenge for the construction industry that resulted in great loss.
Prior to the pandemic, the industry demanded increased productivity, reduced fragmentation, increased collaboration, further standardization, and to address the labor shortage. Therefore, the pandemic has not only presented challenges but significant opportunities for the industry to address key problems and emerge stronger than ever. Below are some of the most significant impacts on the industry, and potential opportunities for recovery.
Covid Challenges
Social distancing requirements forced the closure of construction sites worldwide. As we begin to move past the pandemic, supply chain issues have caused further problems. For example, lumber prices soared as a result of increased demand. In May 2021, prices reached a record high of $1,515 per thousand board in feet.
On-site productivity has been harmed with social distancing requirements and health procedures such as testing. Additionally, migrant workers have had difficulty entering the country with travel restrictions. Furthermore, vaccine mandates are further challenging labor supply in the industry and productivity.
Covid Opportunities
Although Covid presented several challenges and tragedies, there have also been some upsides. People have become more understanding. Key social and environmental issues have come to light. We got to spend more time with people we care about, and we got paid to work in our pajamas. Similarly, it was not all negatives for the construction industry.
Throughout the pandemic, construction played a key role. From developing hospitals in a matter of days to expanding affordable housing to ensure social distancing, the industry experienced new opportunities in addition to setbacks. Record-high levels of government aid could drive increased demand.
Moving forward, integrating technology will allow for more resilient and efficient supply chains. Additionally, diversifying supply chains across business models, sectors, and geographies has proven to protect contractors through economic downturns. Environmental, social, and corporate governance (ESG) will continue to be a key factor for driving innovation as well.
Canadian Construction Industry
The Canadian Construction industry…
- Employs over 1.4 million Canadians
- Generates approx. $141B annually
- Accounts for 7.5% of Canada’s GDP
- Delivers projects critical to Canadian’s quality of life including:
- Clean water
- Energy infrastructure
- Power grids
- Transportation networks
- Road maintenance
- Hospitals
Construction Economics
Typically, construction is far more volatile than the overall economy. Demand is dependant on economic activity, with investment shrinking during times of reduced activity. Although a high level of economic uncertainty remains, research remains optimistic in regards to pandemic recovery in North America.
One school of thought believes that government expenditures combined with major investors focusing on clearing the construction backlog from the pandemic could provide a large boost for the economy. Furthermore, the labor-intensive nature of construction allows for a large volume of the working population to find work.
Considerations As Covid Continues
The most important consideration moving forward is worker safety. Prior to the pandemic, the nature of the industry led it to be one of the most hazardous. Unsafe work practices, complacency with safety requirements, lack of technical support, and limited information have all decreased the safety of these worksites. Each of these safety concerns was amplified by the impact of the pandemic. Moving forward, they must be considered in addition to the pandemic response.
Contractors should remain up to date on relevant local restrictions on construction activities. Additionally, it is important to remember that COVID is not the only risk. Project owners must communicate and work with contractors to identify, assess, and mitigate any potential risks to workers on site. As new innovation rolls out, there are greater opportunities to ensure worker safety that should be adopted.
For contractors looking to improve their contract administration and spend more time on what matters most, we are here to lend a helping hand.
Chloe Aiken
Chloe is a student at Western University who joined ContractComplete for an Intrapreneurship through Venture for Canada. She is currently in her fourth year completing a dual degree with Ivey and Anthropology. Outside of the classroom, you can find her at the dance studio, buying more house plants, or exploring her passion for entrepreneurship.
