b'7 Coronavirus-Relat ed Const ruct ion Challenges t hatwill Cont inue in 2021By Shelley D. Hutchins, LEED-AP The Turner Building Cost Index, which measures costs in the U.S. nonresidential building construction market, fell to a The industry in 2021 will startvalue of 1171 in the third quarter of 2020, a 1.5% quarterly facing significant headwinds,reduction from the beginning of the year. This year marked economists and other expertsthe first time the index from Turner Construction has reduced predict. More than 10 monthsin value since 2010. ?Trade contractor competition has since the first coronavirus casesincreased in many areas as they work to secure backlog due were reported in Wuhan, China,to uncertainty they have about future opportunities," said COVID-19\'s global spread continues to plague commercialAttilio Rivetti, the Turner vice president responsible for construction. Since the pandemic hit the U.S., contractorscompiling the Cost Index in a press statement.across the country have faced a range of obstacles including layoffs, project shutdowns and increased construction costs. Less workVarious sectors of commercial construction will continue to experience a decline even after the rest of the Economists and industry experts predict many of these issueseconomy begins to recover from COVID-19, economists say. will continue to challenge contractors. Here are the top sevenFor instance, experts predict people will continue to work factors to watch: from home more often then they go into a central office, so Labor shortagePre-pandemic, the industry faced a historicconstruction of office buildings remains a gray area in terms shortage of skilled labor and the issue isn\'t going away justof future growth.because COVID-19 has shut down projects and slowed others.The construction of new healthcare facilities also could drop Although firms have been calling back workers who were laidsignificantly because of changes in lifestyles post-COVID-19, off in the spring, some have refused to return to work, citing aaccording to Ken Simonson, chief economist for the preference for unemployment benefits, virus concerns orAssociated General Contractors of America. ?Hospital use family responsibilities. dropped off drastically in the spring and it?s not certain if Looking ahead to once a recovery begins, labor gaps might getvisits for elective surgery and other non-essential procedures even larger, especially in states like California, Texas and Newwill come back,? Simonson said. ?Or will we see growth of York, according to Daniel Pomfrett, vice president of Losalternative medical care through urgent care or surgery Angeles-based project management and cost consulting firmcenters?" He also questioned if nursing home construction Cumming Corp. Lack of worker migration ?especially towould fall because people might be more hesitant to check expensive markets with greater job opportunities likethemselves or family members into the facilities.California and New York ?also aggravates the labor shortage,Travel and hospitality sectors, along with sports or Pomfrett said. performance venues, also look grim according to Simonson. Shrinking backlogAssociated Builders and Contractors\'That\'s primarily because their revenue sources ?sales taxes, Construction Backlog Indicator fell to 7.5 months inconvention income and tolls ?are taking a big hit and aren?t September, a decline of 0.5 months from August?s reading andexpected to get replenished anytime soon as the pandemic 1.5 months lower than last year at this time. In addition, thebegins a third wave of intensity.association\'s Construction Confidence Index readings forPrice increasesThis year has seen fluctuations in the prices sales and profit margins also decreased. The months aheadof construction materials, most recently with the don\'t look hopeful for contractors looking to add to theirskyrocketing cost of lumber. Prices have been rising on most backlog of work, said ABC Chief Economist Anirban Basu in amaterials since May, according to ABC. Its September look at release about the indicator. ?ABC?s survey data indicate thatprices found that among 11 subcategories, eight experienced we are in the early stages of a nonresidential constructionmonthly increases. As construction comes back online spending downturn,? he said. ?With few exceptions, declinesaround the world, increasing demand for products could in backlog have begun to accelerate across all markets andkeep prices on the rise, Basu said. "Despite the lingering regions.? pandemic, the global economy has been recovering, Falling construction costsA variety of pandemic-relatedincreasing demand for key commodities," he said. "Rapid forces have caused construction costs to decline slightly forviral spread, including in Europe and parts of North America, the first time in a decade, which could lead contractors to feelrender materials shortages more likely during the winter a pinch in profits. months." Some contractors are taking proactive steps to www.ohiomasonry.org5'