by Joshua Reap
Harder times make us stronger and that was certainly the case for construction in 2020. With COVID, new tech came onto the site a lot quicker than was happening slowly to that point. Contractors quickly adopted digital transformation strategies to remain robust and get the job done. That has helped construction to have some relative stability when other sectors of the economy were struggling. Being an essential industry in most of the New England region, and with a significant backlog of work, hardhats continued to work even as other sectors shut down. However, the construction market is now starting to feel the effects of the pandemic.
Construction has always been a lagging indicator, meaning it is one of the last sectors to feel the effects of a slowdown. With restaurants, hotels, tourism, and other segments having suffered, many projects were postponed, while others cancelled. New Hampshire and other states with less severe shutdowns have a better construction forecast than places that experienced hard lockdowns. The question now is: Will our V-shaped recovery be at risk of becoming a W?
Builders face historic increased price of softwood lumber as the supply chain disruptions and trade wars continue to be sorted out. Strong housing demand along the entire East Coast will continue to drive the residential market for a while. This is especially in New Hampshire as families from more urban areas seek amenities like room for a home office and easier access to outdoor activities.
With the influx of new residents, combined with the Granite State’s already pent-up demand for housing, the increased demand will continue well beyond the end of the pandemic. Commercial and institutional builders should see some benefit from this, too. With the growth of online retail, fulfillment centers and warehouse construction will drive a large part of the work available to builders.
With a vaccine roll out now happening, there is optimism that normalcy will slowly return in 2021. What can get contractors through that slow ramp up would be time-tested government infrastructure investments. The recently passed $900 billion stimulus does not include state and local assistance; however, there is a possibility of another round in the early months of the new Biden administration. Despite that, the new administration does bring with it some other concerns for the construction industry.
Biden’s tax policies and labor regulations cast a cloud over the future of an economy already under strain from the pandemic. The administration has signaled a desire to roll back tax reforms that helped stimulate the growth experienced just before the pandemic brought everything to a screeching halt. Plus, labor policies favored by the new president threaten to drastically reshape the construction industry and America’s workplaces by stripping employees and employers of their constitutionally protected rights, effectively unraveling four generations of accepted labor standards.
Just how the new year will plan out is unclear, though the ABC is renewed in its commitment to support contractors to get the job done.
Joshua Reap
Joshua Reap is the president and CEO of Associated Builders & Contractors NH/VT Chapter.
