Construction Down with COVID, Turns to Technology

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Robison Wells
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According to Dodge Data and Analytics, nonresidential construction starts fell by 19% in the first five months of the year. In places where lockdowns were mandated, including construction jobs, work levels dropped as much as 80%. The Dodge study indicated that the delays were due to labor shortage, new safety procedures, and lack of materials and equipment due to transportation disruptions.

Through the federal government’s Paycheck Protection Program (PPP) loans, $63 billion was provided to the construction industry, according to the Small Business Administration. This put construction in third place in the biggest users of PPP funding.

“While some sort of adjustment was predicted prior to COVID, the catalyst of it all is COVID,” Julie Hyson, JLL west region project and construction management lead, said in an interview with Globe Street. “The lagging indicators are due to COVID, and there has been an increase in material/lumber pricing as well. In some ways, new baselines were set this year with the shifts in the market. This will lead to optimism for growth from 2022 to 2024 remaining much higher than it was before the coronavirus recession. This is a normal progression based on past recoveries.”

One area that is bouncing back and is predicted to bounce back faster and faster is construction technology. As people look for solutions to both safety concerns and labor shortages and materials unavailability, the use of technological solutions is going to be paramount.

“These tools were previously a ‘nice to have’ and are now a must because teams are more geographically disbursed,” Hyson said. “The question is how long of a period of adoption we will have, how long will it last, or will it last at all? The technology that will lead and have staying power will be tools that leverage AI to capture data and real-time insights. Tech will do more to provide workplace strategies and systematic changes by looking inside buildings.”

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