15 Oct Impacts of COVID-19 on Construction & Business
Since the pandemic began, the entire construction industry has been designated an essential service, primarily for economic reasons. This had a tremendous impact by creating a boom in renovations and new home construction. With many isolating in their homes for months, it appears that homeowners have been paying more attention to the space around them. Many had their children home all the time and their young adults returning home which created a hectic household and they decided they needed to make a change. Whether it be improving their existing home or selling and moving to another home, the results have been incredible for the industry.
With that being said, I want to express how extremely fortunate we are to be living in a region with low cases (Atlantic Canada) and operating in an industry that has seen strong growth. Some businesses are not as fortunate and as a consequence of this prolonged shut down has pushed many to the brink and beyond. We feel the countries who have been hit particularly hard by this pandemic as well as the many tourism and service oriented businesses who continue to suffer. This is why continuing to support local for a weekend getaway, Christmas gifts, and so forth is so always important and critical to business survival right now.
Regarding the renovation and new home construction industry, this boom brought many positive business impacts, such as increased revenue and hopefully profits. However, it is impossible to ignore the fact that we are also experiencing adverse effects which can limit growth and impact the bottom line.
Here are a few consequences of the COVID pandemic and associated boom on our industry:
- Shortages of materials – As many manufacturing plants, including sawmills and wood preserving facilities, had to shut down or reduce their capacity, many products are in short supply.
2. Long lead times – With much reduced production worldwide and many products coming from abroad, the time gap between ordering products and their delivery has doubled or tripled what they have been. With the unpredictability, this may result in logistical issues and project delays.
3. Labour shortage – On top of the already low unemployment in our region and limited supply of skilled trades, this boom has increased demand even more for carpenters, electricians, roofers, and so forth. Many workers remain on reduced hours or off completely with the Canadian Emergency Response Benefit (CERB) or the Canadian Recovery Benefit (CRB). CERB has been positive to start, but now is keeping many trades home rather than returning to full time or at all to the workplace. This has been a struggle for many companies as they have work lined up but may not have people to do the job.
4. Increase cost of materials – With high demand and limited supply of many building materials, we have seen prices for many products double or triple. This will cause the cost of a renovation or new home construction to increase drastically. These rapid changes cause problems especially with lump sump quotes signed contracts prior to the price increases. Companies can’t absorb these extra costs and, unfortunately, clients will see these increased costs passed along.
5. Unqualified contractors – With lots of potential work, many of the most reputable contractors are already booked months in advance. This allows for less qualified or even unqualified people to claim to be contractors. Yes, they are available to start projects sooner or even right away, but buyer be ware, you may want to question why?! Please be careful and don’t allow them to take advantage of you – be patient and wait for a professional.
6. Working from home – With many municipal staff working from home, it has been a challenge to get a permit in a timely manner. Additionally, many suppliers implemented restrictions on the number of people allowed in their facilities or require clients and contractors to make appointments which add to the time required to complete projects.
Even with all the above noted challenges, our industry is working hard to keep the economy rolling and ensuring projects are completed safely and professionally. Having so many people continue to work is extremely positive and contributes to the financial and mental well being of those workers and their families. There is comfort in being able to continue with daily tasks, make a living, and be productive. I can only hope that we continue to act responsibly and limit the impact on all industries, such that everyone can get back to a form of normality.
Dan Monk, P.Eng.
Owner – MONK Renovations