Residential Work Is Up While Commercial Construction Remains Down
If you work for or lead a commercial construction company, you may find your company is not buying as many concrete form ties and other supplies such as concrete forms as it usually does. It’s easy to chalk the lack of work up to COVID-19 as the pandemic has set many plans back because of economic uncertainty. Construction has been negatively impacted by many businesses and municipalities putting projects on hold until they can secure funding for projects.
Not all construction is being put on hold, though. Recent reports show that while commercial construction is taking a back seat, residential construction is seeing a surge in projects.
Uncertainty for commercial construction
Ken Simonson is the chief economist for the trade group Associated General Contractors of America. His group represents the nonresidential sectors of construction. Simonson says that about 60 percent of construction workers are in the commercial and retail sector while the remaining 40 percent work for residential construction.
Many businesses have moved out of their office buildings, allowing employees to work from home if possible. Granted, not all companies or employees have this ability. For those who have not been able to work remotely like retail stores and food industry, workers have had to cut back on hours or shifts significantly to stay in the bounds of public health and safety measures. With many office buildings and stores being empty, nonresidential construction has felt a heavy blow. Commercial developers are putting construction on hold, which is causing a dip in construction prices.
On the subject, Simonson said, “The outlook is fairly bleak for nonresidential construction.” But on the other hand, “New residential construction is terrific, especially single-family homes.”
Good news for residential construction
This news for residential construction workers is surprising and hopeful. Like many other industries and businesses, home construction took a hard hit when COVID-19 cases began appearing. Many crews were unsure about their jobs and when they would see projects start up again.
In a surprising turn of events, the housing market has been thriving during this time. In the current sellers’ market, so many people are looking to buy, but there are not enough homes on the market. Many are building their own homes or are on waiting lists for new homes to be built.
According to The National Association of Realtors, the index of pending home sales increased by 8.8 percent this summer. The group said this is a record high and attribute the numbers to low mortgage rates and people wanting to move out of heavily populated areas. Lawrence Yun, the chief economist for The National Association of Realtors, said, “Even before the pandemic, we had a housing shortage, and one of the factors was a shortage of skilled construction workers. The residential sector is booming.”
Construction employment numbers
This is welcomed news for those in residential construction. The AGC reported that employment in this sector rose 2.1 percent in the summer. However, during that same time, nonresidential construction jobs decreased by 0.4 percent.
The AGC noted that those who are working for distribution center construction are not seeing job losses. During the pandemic, many people prefer to have products and items delivered to their homes instead of shopping in public, so the demand for more distribution centers has increased.
The Bureau of Labor Statistics released its employment statistics in early October. The report showed construction employment took a massive hit in the spring (1.1 million jobs lost in March and April) but saw numbers grow in September by 26,000. Overall, the report by BLS says that as of September, construction recovered about 64 percent of its lost jobs this year. Most of these jobs have been attributed to residential construction and the increase of new home sales. This is encouraging for those in new home construction, while those in commercial and retail construction are hopeful that their employment numbers will grow as the economy recovers.
How Forming America can help
Finding a reliable partner in these uncertain times should be one less thing to worry about. Forming America is a partner you can trust for your supply needs. Contact us today for your concrete form ties or to sell us your used materials.