Despite the many issues that are plaguing 2020, the Marcum Commercial Construction Index for the second quarter reports that the industry is maintaining a relatively even keel. In particular, unemployment in the construction industry has dropped back down to 8.9% after seeing record highs in April and March. The unemployment rate across all sectors is at 10.2%.
“The data indicates that construction has recovered faster than any other major economic segment. Over the three months ending in July, the industry recovered 59% of the jobs lost in March and April,” said the report, written by Anirban Basu, the chief construction economist at Marcum.
However, Basu warns that things may not be so rosy in the near future. He says that the rebound in the industry was chiefly due to the backlog of projects, and those may dry up soon. “Due to the sudden supply shock to the U.S. economy and massive dislocations sustained during the second quarter, many contractors report both project postponements and cancellations in unusual numbers.”
The best performing sectors have been in public safety (+39.2%) and sewage and waste disposal (+18.4%) while the sectors of lodging have dropped (-14.6%) as well as manufacturing (-9.1%).
The report goes on to say: “While the office, lodging and retail construction markets have been negatively impacted by the COVID-19 outbreak over both the short and long terms, other construction segments stand to be beneficiaries. With so much economic activity shifted online, e-commerce-related segments such as fulfillment and data centers stand to be major generators of demand for construction services going forward.”