Two Months Later, Updated AEC Industry Poll on COVID-19 Impacts

What a difference a couple of months makes. When DBIA first polled our community at the end of March, uncertainty reigned. It was early into pandemic mitigation efforts and no one knew what to expect. Here we are, two months later, and DBIA’s newest poll shows more projects have been postponed or canceled, more positive cases of coronavirus on teams have led to more deaths and remote work has gone from a unique experiment to a daily necessity. There is one constant. Uncertainty still reigns.

What’s Changed?

The answers, provided by 316 respondents between May 7-15 are not scientific, but they do show an evolution in how industry and Owners have responded to the pandemic threat and its ongoing disruption to projects and team members. Respondents represent a diverse cross-section of disciplines and sectors.

Among the biggest shifts between polls is a reported increase in project delays or terminations. While 45% of those polled in March reported delays or cancelations, by May 60% say they have experienced owner-directed delays or stoppages.

Supply chain issues remain constant over the two months while the shortage of government personnel impacting permitting, inspections, certificates of occupancy, awards appear to have lessoned from 58% early in the epidemic to 40% now as many agencies have settled into new administrative procedures.

Sadly, respondents report an increase in the number of positive coronavirus diagnoses on project teams from 18% in March to 25% in May.

“Several people have had to go through quarantine, several people have tested positive for the virus and as of today(5/11) we have had three COVID-19 deaths.” 

“We lost certified operators en masse- when one became ill, three others were sent home. We have to operate 24/7, so this was a serious disruption and caused us to call in others for extended over time to the point of fatigue.”

“One project team was quarantined after a positive test by a staff member. One project was shut down for 30 days and is getting ready to restart.”

“I’ve had to quarantine at home due to sickness.”

Making the Adjustment

While remote work has become the norm for our industry during this pandemic (when possible), the challenge for organizations facing many different stay-at-home orders and various state requirements has led to many other creative staffing approaches. 15% of those polled say they have now implemented policies beyond telework to include alternating workdays, rotating shifts, administrative leave for dependent care, and reduced hours. The number reporting layoffs/furloughs remains largely unchanged from March at about 10%.

 Biggest Challenges 

The industry has been “building the bridge as we walk on it” for months now but uncertainty remains among the challenges expressed most frequently in this second AEC poll.

“There is a lot of new data coming all the time which often requires changes to our operations which is difficult to vet, manage, and implement while maintaining a productive work environment.”

The irregular implementation of government guidance and misinformation causes confusion. We need a more uniform message, otherwise more confusion, exposure to risk.”

Lack of consistencies between projects, GC’s, Owners, municipalities, states, etc., is a real challenge.”

“How can we make sure there’s not a significant 2nd wave?”

Looking to the Future

COVID-19’s economic impact on industry, public and private Owners, and the nation weighs heavily on the AEC industry. 30% of those polled qualified for assistance under the CARES Act stimulus with the vast majority (82%) applying for relief. 83% of respondents report their businesses have been classified as essential.

A growing number of firms (34%) report working on new projects related to pandemic mitigation, emergency services, and capacity building. From creating alternate care facilities in hotels, convention centers, and dorms to building new capacity in existing hospitals America’s, design-build teams have delivered expedited emergency facilities in states nationwide. In the transportation and education sectors, several existing projects have been expedited as less traffic and no students on campus have provided the opportunity for more work.

Respondents in this DBIA poll predict projects could become more expensive with the implementation of new safety protocols, commodity cost hikes, and other economic factors in the COVID-19 work environment. They also anticipate longer delivery times as social distancing policies impact scheduling and the use of creative strategies are needed to manage project crews on site. At the same time, Owners’ capital is limited and public agencies in states and localities, especially, will face tightening budgets.

“Much of our work is in the public sector and the hits that public agencies are taking to their budgets will ultimately lead to fewer projects and perhaps more delayed or canceled projects.”

“We are going to see budget issues because we, as a DOT, are funded by the gas tax, sales are down, prices are down.”

“Although we’re incurring higher costs on our projects, we have not yet begun to bid projects at higher pricing levels, but this is possible in the future.”

“I think budgets will have to increase for additional safety measures, as well as increased schedule durations; work/trades will have to be scheduled differently than in the past and it will most likely take longer to build our projects.”

But with these challenges also come opportunities. And, according to many polled,  design-build is poised to (once-again) spur the recovery by delivering innovative projects quickly while maximizing limited budgets.

“Infrastructure, which is a major contributor to the construction industry, will now be at the forefront of the economic recovery and stimulus for post Covid-19 and beyond (next 5 to 10 years). Outlook is promising.”

 “A lot is dependent on Federal action. The opportunity is there. Industry is primed and positioned to act.”

“Design-Build will be a big part of a federal stimulus package to get projects on the street faster.”

“I see more design-build deliveries coming, especially for some of the larger transportation projects, to optimize the fiscal budgets.”

“Design-Build will continue to grow.”

 DBIA is committed to help America’s design-build industry and Owners prepare for our nation’s recovery. We’ve taken our 2020 Design-Build Done Right® education and certification coursework virtual to ensure design-build teams have access to all the training they need to be prepared for what lies ahead. It’s more important than ever for teams to enter this recovery trained and ready to deliver successful Design-Build Done Right® projects for our communities.