US Sees Decline in Construction Output
Construction may be considered essential during these troubling economic times, but that doesn't mean the industry is immune to the crisis. According to the latest readings from Associated Builders and Contractors (ABC), construction output is down significantly due to interruptions from COVID-19.
The U.S. Bureau of Economic Analysis found nonresidential and residential fixed investment contracted by 27% and nearly 39%, respectively. Nonresidential fixed structures investment fell in between at almost 35%. Overall, the second quarter of 2020 saw an annualized contracting rate of 32.9%.
"A number of key construction segments like office, lodging and commercial were hit especially hard by the pandemic," ABC Chief Economist Anirban Basu said in a press release. "Many contractors in these segments maintain an ostensibly healthy level of backlog, according to ABC's Construction Backlog Indicator, but the possibility of outright cancellation remains elevated as obtaining project financing becomes more challenging and vacant office and retail space accumulates."
Economic recovery isn't yet in sight, he noted, as cases spike in certain states, which will likely cause additional delays.
—Andrew Michaels, editorial associate