August 12, 2020

A new report finds coronavirus mitigation has dampened construction productivity

Contractor productivity, and profits, have taken a wallop thanks to COVID mitigation measures and burnout.

Surprising no one, a new report released by the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) last month has revealed that the United States construction industry is taking major hits to productivity and profits as a result of coronavirus mitigation measures. The extra time to screen employees, staggered hours, and distancing and sanitation measures cut SMACNA members’ productivity by 17.9 percent and reduced average project profits to a 7 percent loss.

The construction industry is eager to get back to work, but it’s still suffering from pandemic-related squeezes. With the economy weak and COVID cases (re)surging in states across the U.S., developers have been slow to move projects forward (see the precipitous drop in Los Angeles construction permits). An oversupply of construction workers is pushing down wages, but global supply chains are being disrupted, leading to higher material costs.

SMACNA’s study, conducted with ELECTRI International, a research group sponsored by the National Electrical Contractors Association, surveyed 20,000 hours among its own members and 92,000 hours of ELECTRI members’ time from January through May 2020. Across those hours, the sampled contractors cited spending 8.7 percent of their workdays on coronavirus mitigation such as extra hand washing. Additionally, the study found that burnout, anxiety, social distancing, altered schedules, and other pandemic-related factors had dampened productivity by another 9.2 percent, leading to a combined 17.9 percent decline in productivity across the board. That’s 85 minutes lost out of an 8-hour day. According to the report, that means contractors are losing 7 percent of total project cost per project, on average.

Those results appear consistent with what other sources, including the American Institute of Architects’ Architecture Billings Index, have reported about industry-wide slowdowns. Ken Simonson, chief economist of the Associated General Contractors of America (AGC) told Construction Dive that AGC’s June contractor survey revealed that 57 percent of those polled reported similar delays or disruptions as a result of the pandemic.

Because SMACNA surveyed the beginning of the pandemic when social distancing and hygiene measures were first being introduced, the process may have been streamlined in the following months, but it’s likely that delays and slowdowns will be part of construction for as long as the pandemic persists.