Steel Markets

COVID-19 Layoffs Accelerating in Construction

April 7, 2020

Layoffs are rapidly increasing at construction firms, says a new survey by the Associated General Contractors of America. Twenty-seven percent of firms surveyed by AGC this week reported layoffs as a result of the COVID-19 crisis, contrasting with government data for March showing construction employment declining by 29,000 as of mid-month.

“The March employment data does a better job reflecting market conditions before the pandemic than it does the widespread disruptions that have occurred during the past few weeks,” said Ken Simonson, the association’s chief economist. He noted that the federal employment figures are based on payrolls as of March 12, when relatively few states or individual owners had directed contractors to stop work. “Our survey, meanwhile, indicates rapidly deteriorating labor and market conditions for the construction sector.”

Simonson added that 27 percent of respondents to the survey reported they have furloughed or terminated construction workers. The share of firms that said they had been directed to halt or cancel projects by their clients had jumped to 55 percent from 39 percent the week prior. Over one-quarter of respondents reported they had been directed to stop construction activities by government officials.

In addition, 59 percent of respondents in the latest survey reported a variety of problems causing project delays or disruptions, compared to 45 percent last week. The most common source of delay or disruption, cited by 35 percent of respondents, was shortages of material, parts and equipment, including vital personal protective equipment such as respirators for workers. Twenty-eight percent reported shortages of craftworkers, while 16 percent said projects were delayed by shortages of government workers needed for inspections, permits and other actions.

The government data showed employment as of mid-March totaled 7,605,000, an increase of 162,000 (2.2 percent) from a year earlier. The March total followed a mild winter in which industry employment hit an 11-year high in February.