{"id":12395,"date":"2020-07-01T15:48:01","date_gmt":"2020-07-01T15:48:01","guid":{"rendered":"https:\/\/insulation.org\/io\/?post_type=articles&p=12395"},"modified":"2020-10-22T14:58:57","modified_gmt":"2020-10-22T14:58:57","slug":"eight-ways-the-coronavirus-crisis-is-changing-construction","status":"publish","type":"articles","link":"https:\/\/insulation.org\/io\/articles\/eight-ways-the-coronavirus-crisis-is-changing-construction\/","title":{"rendered":"Eight Ways the Coronavirus Crisis is Changing Construction"},"content":{"rendered":"

\"\"<\/a><\/p>\n

In the span of 2 months, the coronavirus crisis has demanded sweeping changes from the U.S. construction industry, and experts say many of them will remain in place even after the outbreak recedes.<\/p>\n

As contractors return to work on sites that were shut down by shelter-in-place initiatives, they face an industry that has been drastically changed by the both public health and economic effects of the pandemic.<\/p>\n

\u201cThere are new factors coming into play now that you or I never thought about,\u201d said Joe Natarelli, leader of Marcum LLP\u2019s national Construction Industry Group. \u201cAnd people need to plan now to be prepared for the long term.\u201d<\/p>\n

From a renewed emphasis on jobsite safety to longer project delivery times and the increased influence of organized labor, the virus has upended many facets of the industry. Companies that try to return to a business-as-usual mentality will face a harsh new reality, Mr. Natarelli said.<\/p>\n

\u201cThere\u2019s been a paradigm shift in many areas of construction that is leading contractors to do many things differently than they did in the past,\u201d he said.<\/p>\n

Here are 8 ways that COVID-19 has altered the construction industry for the near future and beyond.<\/p>\n

1. Jobsites Will Be Cleaner and Safer<\/h2>\n

The virus put a spotlight on the importance of worker health and safety, and U.S. contractors responded by implementing new jobsite policies such as staggered shifts, employee temperature checks, and top-to-bottom disinfections of jobsites, tools, and machinery.<\/p>\n

Superintendents at Bridgewater, Massachusetts-based Callahan Construction Managers have implemented a variety of protocols to promote social distancing and employee health, including a ban on carpooling, a 100% mask-and-glove policy, and well-stocked handwashing stations, according to\u00a0President Pat Callahan. In addition, the company\u2019s safety team made 200 gallons of sanitizing soap that has been distributed across jobsites.<\/p>\n

This emphasis on cleaner, less crowded work areas is one that will not recede after the virus does, Mr. Natarelli said.<\/p>\n

\u201cContractors can\u2019t be thinking that they can bring workers back after all this dies down and it will be the same as always,\u201d he said. \u201cThey\u2019ll have to include a lot more health and safety measures so that employees are comfortable returning to work.\u201d<\/p>\n

Medical experts\u2019 belief that outbreaks across the world will come in waves for months or even years to come make safety plans important now and into the future.<\/p>\n

\u201cEmployers can no longer conduct business the same way as they did in the past,\u201d Attorney Michael Rubin, Chair of Goldberg Segalla\u2019s national OSHA and Worksite Safety Practice Group said.\u00a0\u201cEspecially now, they need to be flexible and, in many instances, creative, as they think of new ways to perform certain tasks that they have performed in the same way for many years in the past.\u201d<\/p>\n

2. Distancing Will Be the Norm, Via Technology<\/h2>\n

The current emphasis on social distancing on jobsites\u00a0will likely continue even after the current health threat passes,\u00a0Mr. Rubin said.\u00a0\u201cWe can expect to see less group activities and more clearly defined procedures and protocols for even some of the most routine work tasks,\u201d he added.<\/p>\n

Even as the current outbreak subsides in many areas, state and local officials are putting measures in place to mitigate risk on construction sites going forward.<\/p>\n

The need for social distancing has also changed how contractors interact with project teams and with customers, and companies have developed unique solutions to stay in touch. California-based AECOM has launched an interactive web-based tool that allows clients to hold virtual public meetings, a crucial component in the process of creating public projects such as town halls, stadiums, and concert venues. The platform allows AECOM employees and customers to engage with the public about the impact and benefits of proposed projects without leaving their homes.<\/p>\n

\u201cIt\u2019s exactly like a real public meeting, but without the in-person element,\u201d Kevin Carlson, AECOM\u2019s Global Lead for Digital Transformation, noted.<\/p>\n

In addition, in some areas of the country,\u00a0building departments are implementing remote technology for inspections, a trend that will continue after the health crisis is over, according to Stephen Poposki, a building official in Cape Coral, Florida.<\/p>\n

For instance, when faced with a recent inspection delay on a project in Nashville, Tennessee, general contractor DPR\u00a0submitted 360-degree photos and videos to the local fire marshal for a virtual inspection, allowing it to turn the project over on time.<\/p>\n

\u201cI think we\u2019re going to come up with some really efficient ways of doing business,\u201d said Mr. Poposki. \u201cAnd because people are also very aware of what\u2019s going on in the news, they\u2019re really more willing to accept change right now, and this is the perfect time to do it.\u201d<\/p>\n

3. Projects Will Take Longer<\/h2>\n

Many of the major safety changes on construction sites will add to the time it takes to complete projects. While crucial to keeping workers healthy, techniques such as suiting up with PPE, only allowing 1 trade on a site at a time, and staggering work shifts will slow down progress, and the days of fast-tracking a project may be over\u2014at least for now, experts say.<\/p>\n

\u201cConstruction schedules will not be the same as they used to be,\u201d said Mike Benike, Executive Vice President at Rochester, Minnesota-based Benike Construction, during\u00a0a COVID-19 webinar sponsored by Destination Medical Center, a public-private economic initiative in Rochester, Minnesota.\u00a0\u200b\u200b\u201cThings will take a little longer because we won\u2019t be able to have lots of people in the same place at the same time.\u201d<\/p>\n

Mr. Natarelli advises contractors to consider time constraints when bidding out new jobs, to make sure the contract reflects a reasonable construction schedule. The entire project team, including owners, architects, subs, and other partners, needs to understand that at least in the near term,\u00a0projects will take longer than before.<\/p>\n

\u201cWe\u2019ll be planning jobs differently going forward,\u201d he said. \u201cThese longer completion times aren\u2019t going to go away anytime soon, and we need to be prepared going forward that if another wave of the virus does come back, we\u2019re in much better shape and we\u2019re much better prepared.\u201d<\/p>\n

4. Telework Will Become More Common<\/h2>\n

The coronavirus has also brought major changes to construction\u2019s back offices. Forced to stay at home, many office employees have kept business operations running via remote work, relying on technology like videoconferencing, emailing, and texting to stay in touch.<\/p>\n

This nationwide experiment in telework will likely cause many leaders to think about making the practice permanent. A recent Gartner study found that 74% of American companies will move at least 5% of their office workforce to permanently remote sites, and nearly a quarter of respondents said they will move at least 20%\u00a0to permanently remote positions, according to a survey of the company\u2019s chief financial officers (CFOs).<\/p>\n

\u201cCFOs, already under pressure to tightly manage costs, clearly sense an opportunity to realize the cost benefits of a remote workforce,\u201d said Alexander Bant, Practice Vice President, Research for the Gartner Finance Practice.<\/p>\n

While the trend toward remote work will lead to a dramatic reduction in the need for office space for many companies,\u00a0others may think about expanding, noted Ross Forman, Managing Director of Business Advisory firm BDO.<\/p>\n

These firms may seek to take advantage of lower rents to expand their office space to allow for greater social distancing in the workplace. This could mean a move away from the popular open office space layouts to allow for additional private space \u201cto reassure skittish staff long after the worst of COVID-19 infections have passed,\u201d he said.<\/p>\n

5. Union influence will grow<\/h2>\n

Since World War II,\u00a0the percentage of the U.S. construction industry involved in union memberships has steadily declined, from about 87%\u00a0of the workforce in 1947 to 12.8% in 2018.\u00a0Nevertheless, since the pandemic began, trade unions have taken on renewed influence in many areas of the country by advocating for members\u2019 best interests in keeping sites operational and safe.<\/p>\n

Recently trade unions in New York state were instrumental in persuading government officials to shut down projects that were previously allowed to continue,\u00a0and in Massachusetts, 2 unions staged walkouts earlier this month in protest of what they deemed to be unsanitary working conditions.<\/p>\n

At the same time, other unions have wielded their influence to keep members on the job. North America\u2019s Building Trade Unions recently teamed up with the Associated General Contractors of America [and NIA] to ask government officials at all levels to make construction an essential service and exempt it from regional, state, and local shutdowns.<\/p>\n

During the crisis, unions have provided a voice for workers who are struggling to decide whether they should stay home or go to work, said Mark Erlich, a Fellow at Harvard University\u2019s Labor and Worklife Program. Unions also help laborers find new work after a layoff.<\/p>\n

The appeal of unions will be stronger than ever going forward, Mr. Erlich said, a trend that \u201cwill likely come into conflict with cost-cutting measures that construction employers will inevitably be considering once they reckon with the financial losses from the crisis.\u201d<\/p>\n

\u201cIt\u2019s going to cost more money and not going to be as efficient as in the past, but the market is going to force those types of changes,\u201d Mr. Natarelli said.<\/p>\n

6. Demand for Project Types Will Change<\/h2>\n

The coronavirus outbreak has reshaped the types of projects that will be built this year and
\nfor many years to come. Hospitality, retail, and entertainment projects are likely to be in less demand, while healthcare construction and healthcare-related manufacturing projects could see more activity, according to Charles Hewlett\u200b,\u00a0RCLCO\u00a0Real Estate Advisors\u2019 Director of Strategic Planning.<\/p>\n

In addition, demand for distribution and warehouse space may likely increase as U.S. companies favor higher inventory levels and emphasize supply chain resiliency over efficiency, Mr. Hewlett said.<\/p>\n

\u201cIn the long run, expect more manufacturing facilities to locate in North America to ensure supply and access to markets during episodes like this one, a boon to economic growth and industrial and logistics facilities in the U.S. and Mexico,\u201d he said.<\/p>\n

Keith Prather, Market Intelligence Expert for Olathe, Kansas-based business management consulting firm Pioneer IQ,\u00a0agreed, saying that less reliance on Chinese-made building products will create a surge of new manufacturing- and supply chain-related construction projects, such as factories and warehouses.<\/p>\n

Experts are divided on how infrastructure initiatives will fare in the near future, with some noting that projects like road and bridge construction could suffer as state Department of Transportation revenue declines because of decreased fuel tax revenues, and federal infrastructure funding may be waylaid as Congress turns its attention to COVID-19 mitigation measures for business and unemployed Americans.<\/p>\n

Nevertheless, some public works projects have received a shot in the arm because of the pandemic. The Airport Improvement Program will invest $3.2 billion in the development and modernization of aviation facilities across the country, and the governors of some states, including Florida and Minnesota, have accelerated billions of dollars of transportation projects in an effort to lessen the economic fallout from the coronavirus pandemic and to take advantage of fewer vehicles on the road.<\/p>\n

7. Supply Chains Will Recalibrate<\/h2>\n

Even before the outbreak hit the United States, the coronavirus created major global supply chain disruptions, especially of goods from China, the source of about 30% of U.S. building materials last year.\u00a0Government containment efforts and quarantines in China slowed or shut down factories in dozens of cities and provinces, leading to a falloff in production of everything from cars to smartphones. U.S. builders have noted delays and shortages in items like steel, surfacing, and case goods.<\/p>\n

Wendy Cohen, Vice President of Operations for Sacramento, California, construction management firm Kitchell CEM, said she has experienced some delays in material availability since the crisis began. Kitchell project teams are working with clients, architects, contractors, and trade partners to identify shortages and develop creative solutions for the projects that the company continues to build for essential clients such as schools, colleges, and the Los Angeles Department of Public Works.<\/p>\n

With so many sourcing challenges on the horizon, many American construction firms will be hesitant to resume orders from Chinese suppliers, according to Mr. Prather.<\/p>\n

\u201cHow we source projects has a lot of weaknesses,\u201d he said.\u00a0\u201cWe believe that going forward there will be a lot of reshoring back in the U.S., where we\u2019ll see an increase in our manufacturing ability here as well as heading into Mexico.\u201d<\/p>\n

Mr. Natarelli said many of his large contractor clients that are bidding out jobs include clauses in their contracts that call for as many as 5 backup sources for materials. Many are willing to pay higher prices for supplies coming from less risky locations.<\/p>\n

\u201cAlternative suppliers are very big right now, and contractors are weighing the risks with the rewards,\u201d he said.<\/p>\n

8. Modular Adoption Will Increase<\/h2>\n

An enhanced focus on worker safety will help accelerate the industry\u2019s move to offsite construction methods. While contractors like PCL, Clark, and Mortenson have relied on prefabrication for many years, Mr. Natarelli said the coronavirus pandemic will motivate more firms to investigate the benefits of offsite building.<\/p>\n

The assembly-line efficiency and climate-controlled environment of factory production can save on labor costs and shorten project schedules, but other advantages will take center stage in post-pandemic construction, according to Mr. Natarelli, including increased site safety and reduced congestion.<\/p>\n

\u201cIt reduces the amount of time you\u2019re in the field, and keeping the labor force in a controlled environment is good from a health standpoint, too,\u201d he said. \u201cSo maybe now you have a job that went from 6 months to 9 months and maybe this can shave that to 8 months while you\u2019re also promoting social distancing, too.\u201d<\/p>\n

 <\/p>\n

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This article was published in the July 2020 issue of Insulation Outlook<\/span><\/em> magazine. Copyright\u00a0\u00a9 2020 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook<\/span><\/em> magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized\u00a0 duplication is strictly prohibited and would violate NIA\u2019s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org<\/a> to reprint or reproduce this content.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the nation gets back to business (with the coronavirus still out there), how is the \u201cnew normal\u201d affecting operations? 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