We all know that Covid-19 had a significant impact on the construction sector (though some places weathered the storm better than others), but some sectors of the industry have been harder hit than others. A recent survey from the consulting group Appleseed Strategy highlights where the hard hits have been and where the opportunities are—because it’s not all bad.
Appleseed begins their survey by pointing out statistics that we’ve heard before and published here on this blog several times: that more than 70% of construction companies have seen their billings drop in the second quarter of 2020, and 85% expect another drop in the third quarter. But where are the hardest-hit areas?
The Good: Residential
One sector that has been making the news, with eviction moratoriums and foreclosure protections, is housing—particularly affordable housing. The survey finds that these housing developments are still moving forward at a rapid clip, especially as many people look to lose their homes and need to downsize to somewhere cheaper.
Similarly, the suburbs aren’t the place seeing the rise in growth, but in medium-density housing projects, particularly near transit hubs (also known as “transit-oriented development”).
“People see there’s maybe another kind of typology for suburban housing,” said Nancy Ruddy, cofounder of the New York City architectural firm CetraRuddy. “It gives you all of the benefits, what we all love about urban cities, culture and great food and activities and things like that, but maybe in a slightly less dense environment.”
The Bad: Offices and Hospitality
With so many people working from home—and doing so successfully—there has been much speculation about a significant ground-shaking change to the office environment. Will people need an office in the future? Right now, nearly six months after the lockdown, all of those office buildings are standing semi-vacant, and investors are unsure about whether it’s a good idea to continue building new office structures in a world where office buildings might not be in significant demand.
Hotels aren’t seeing much growth, either, as the Appleseed survey found that 75% of respondents believed that hotel travel was not safe and would not be secure for several months.
In Flux: Higher Education
Universities are in a tricky situation. They, like office managers, are finding that they can run much of their work online without their students ever leaving their dorms (or even being on campus at all). So standard learning environments are down, with no new push for more classrooms.
However, there has been continued investment in hands-on areas, such as laboratories. So science, technology, and medicine buildings seem to be going strong when it comes to new construction.
Of course, all of this could change. If there’s one constant in Covid-19, it’s that the industry is always in flux. And what may be hurting one week may be growing the next.