Nearly 40% of Contractors Have Laid Off Workers, AGC Survey Says
In addition to increased safety protocols and disruptions on jobsites around the country, the construction industry is facing something it has seen very little of in recent years—layoffs due to work slowdowns and postponed projects.
An April 10 national survey from the Associated General Contractors revealed that 53% of firms report they have been directed to cancel current projects or those scheduled to start within 30 days. As a result, nearly 40% of firms said they have laid off employees, and 74% are seeking Paycheck Protection Program loans.
Most contracting firms in Colorado are continuing to work, says AGC of Colorado CEO Michael Gifford. “We’re not hearing about any widespread layoffs here, other than some on the office side of things, and we haven’t had companies asking us for help with layoffs.”
Firms are continuing with estimates and proposals and are seeking permits in some cases, Gifford adds. “It may be reflective of the super-strong demand that exists in the Colorado market,” he says. However, some government entities may need to reallocate capital funds toward health and safety, which could hurt future projects.
“Owners are not only halting many current construction projects but are canceling a growing number of projects that have not yet started,” said Ken Simonson, AGC’s chief economist. “Inevitably, that has caused a growing number of contractors to furlough or terminate jobsite workers.”
Nearly 19% of AGC firms said they had already experienced project cancellations, and more than 11% of the survey’s 830 respondents reported that an owner had canceled a project still in the preconstruction phase.
The share of firms that reported furloughs or terminations rose to 40% in the latest AGC report, up from 31% in earlier surveys. More than one out of three firms (36%) has furloughed or terminated jobsite workers, while 18% have laid off office or other workers.
No region-specific data exists for firms in the Mountain States, where industry leaders report scattered project shutdowns, mostly in counties that have gone beyond statewide requirements to limit personal contact on jobsites.
However, Wayne Hammon, CEO of Idaho AGC, says that all work in Idaho’s Blaine County has been suspended. “While there has not been any blanket shutdowns anywhere else in the state, a number of contractors have reported a few projects, mostly public works, being placed on hold by owners.”
“Our governor has not enacted any shelter-at-home mandates yet,” says Russ Hanson, executive vice president, AGC of North Dakota. The state’s DOT is continuing with bids, awarding contracts and is working to implement virtual preconstruction meetings.