How COVID-19 is Affecting the Construction Supply Chain

John McShain

The impact of COVID-19 on the construction industry is evolving as the reach of government–mandated closures and stay-at-home orders continues to expand.
The coronavirus outbreak is expected to impact six areas related to construction projects:

  • Employee Health and Safety
  • Material Delays
  • Concerned Clients and Lenders
  • Quarantines and Travel Bans
  • Legal Issues
  • Global Uncertainty

At Freese and Nichols, we have not seen specific notices from vendors and manufacturers we contact regularly regarding their current supply being impacted at this time, especially for domestically sourced products.  However, if factory shutdowns occur and expand across multiple states, the supply chain could be interrupted as current inventories are depleted.

The coronavirus pandemic has caused more than one out of four contractors to halt or delay work on current projects, according to a  survey  released March 20 by the Associated General Contractors of America. However, many of those projects likely involve commercial development. In most states, cities and counties under lockdown or a shelter-in-place orders, construction involving public works projects has been designated essential work that can continue while following Centers for Disease Control guidelines for keeping workers safe.

In Houston, for instance, industry groups have been in contact with government entities, including the City of Houston, Harris County, the Harris County Flood Control District and the Texas Department of Transportation to ensure that projects for those agencies can continue. Contractors are implementing social distancing on work sites, having office staff work remotely and holding meetings by teleconference as much as possible. Permitting also is being handled online.

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