Construction sector recovers after COVID-19 [Column] – Read Eagle – Community News
Covid-19

Construction sector recovers after COVID-19 [Column] – Read Eagle

The construction industry has been significantly affected by COVID-19 and has continuously adapted to adapt to the ongoing shocks of the COVID-19 variants. There has been a perfect storm of concerns in the construction industry, including the challenges of hiring construction workers, the massive disruption in logistics and supply chain, rising costs, resistance to COVID protocols and recommendations, and the lingering uncertainty around us.

Glenn Ebersole

Construction costs are expected to continue rising through 2022, mainly due to insufficient availability of materials and labor, which will hamper the recovery until at least the first half of 2022. Data from the US Bureau of Labor Statistics shows that there has never been a time when so many construction material costs (steel, wood, aluminum) have risen so rapidly at the same time.

Two persistent challenges that have negatively impacted the construction sector’s recovery in 2021 will continue after COVID-19.

Supply chain delays and record high costs of multiple key building materials will continue to put pressure on project lead time and profitability.

The COVID-19 variant will slow economic growth significantly, with the potential for future waves of the pandemic to hinder recovery even more.

Persistent logistical backlogs with ongoing global production and shipping shutdowns due to the COVID-19 variant will limit suppliers’ ability to catch up with demand. Transport costs will also rise as production resumes.

Workforce availability will continue to disrupt the post-COVID-19 recovery and may have the greatest negative impact on the construction industry and individual contractors’ return to profitability. Unfortunately, the challenge for construction labor is expected to increase next year, resulting in rising construction labor costs in 2022.

The big question regarding the labor market is: how do we solve it after the pandemic? The labor shortage is a global problem for customers due to concerns about not having enough labor to fulfill contracts. The most challenging construction craft positions to fill are workers, carpenters and heavy equipment operators. Project managers and construction supervisors are the hardest to find for full-time positions. The construction industry will continue to struggle after the pandemic to recruit new entrants with the required skills into the job market.

Rising raw material costs are weighing down the already tight margins for construction companies. A strategic approach is needed to address this challenge, such as shifting to off-site manufacturing rather than on-site construction. There is also a need for extensive use of new technologies to increase the efficiency of the project delivery system.

With the far-reaching uncertainty in a post-pandemic world, it will be difficult for construction companies to be confident in their plans for 2022 and beyond. And yet there is a golden opportunity for the construction industry to recover from the crisis caused by COVID. NOW is the time to take an innovative leap forward and address the structural problems that have hindered the construction industry in the past in terms of growth, productivity and profit margins.

Socrates offers great advice for the construction industry regarding recovery from COVID-19:

“The secret to change is to focus all your energy, not on fighting the old, but on building the new.”

Longtime columnist Glenn Ebersole is a registered professional engineer and a Strategic Business Development/Marketing Executive and leader in the AEC industry and related fields. He can be reached at [email protected] or 717-575-8572.

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