Survey: Workloads Decline Amid Virus Outbreak
Total construction workloads fell to a net balance of -12% in the first quarter of this year, according to the Q1 2020 Royal Institution of Chartered Surveyors (RICS)/Association for the Advancement of Cost Engineering (AACE) US Construction and Infrastructure Survey.
The drop follows a net balance of +45% reported in the fourth quarter of 2019.
"It is not a surprise that the feedback received regarding current workloads has turned modestly negative given the rising impact of COVID-19 on the wider economy during the period the field work was conducted," says Simon Rubinsohn, chief economist at RICS. "New business inquiries are flatlining and payment delays rising."
Private industrial and commercial workloads experienced the largest declines, while public work has been more resilient. Infrastructure is reported at a net balance of +5%, down from +54% in the previous survey. Survey respondents noted that construction activity rose in communication and airport sectors but road and rail work fell sharply.
"The prospects for the next 12 months are fairly flat," says Rubinsohn. Respondents expect a net balance of +5% for infrastructure, with non-infrastructure workloads at a net balance of zero.
"Partly this can be explained by the toll the hit to business sentiment will exert on private investment in structures," Rubinsohn notes. "But this is likely to be compounded by pressure on state and local budgets in the face of lost revenues and rising costs."