The construction industry is easily one of the biggest sectors in the US. It’s essential in bringing in jobs and livelihood to many Americans. However, because of the pandemic, the industry is not doing very well. But it’s slowly adapting to the given circumstances, and it’s expected to grow again in the coming years.
The construction industry owns around 7% of the overall GDP of the U.S. It’s estimated to be worth more than a trillion dollars, and it’s expected to grow to tremendous sizes during the coming years. However, the pandemic changed all that.
The General State of the Industry
The general state of the industry right now looks decently well compared to what it faced last year. In 2020, the overall industry shrank by almost 10%, reducing its projected revenue by a staggering $750 billion. Strict quarantine protocols made sure of this. Additionally, because of international shipping problems, there is also a lack of materials in the industry. This, in turn, has made it much harder for firms to finish projects in time.
Massive Layoffs
One of the highly affected entities in the construction industry is private contractors, who are looking to accomplish thousands of construction projects this year. But because of strict quarantine protocols last year, most of these construction projects are left with a skeleton crew to handle it, immensely increasing their duration and giving few jobs to those who need it.
To survive, most of these contractors had to lay off some of their workers. About 40% of firms reported laying off multiple workers due to the lack of projects. Other firms had to do so because they lacked the necessary revenue to pay them. As a result, some have applied for a paycheck protection program to ensure that their workers get the funds they need throughout the year.
Increased Home Prices
The massive layoffs, expensive materials, and the overall lack of manpower have put the industry into a precarious position: increasing home prices to meet demands.
There is still a massive demand for homes in the country, and that demand isn’t going away anytime soon. However, because of the sufferings of the industry, newly-built homes had increased by double of its projections last year. This is a desperate move for the construction industry to survive, and some consumers are being forced to shoulder this weight.
Consumers are still purchasing newly-built homes despite the increase in their prices. However, some are looking for cheaper and more feasible alternatives.
Prefabrication
Consumers are looking for other options because of the lack of construction projects this year. Contractors are also lying low because of the current dangers of the virus. This is why the prefabricated buildings sector is becoming one of the fastest-growing sub-sectors in the industry.
Prefabricated homes are much cheaper than built ones. This is because there is less pay for manpower to build it. Some experienced people can also do it themselves, given enough time and effort. Due to the lack of contractors or residential construction projects, people are resorting to prefabricated homes to build their homes today.
Another market that’s gaining sales in the prefabricated buildings market is garage kits. Millions of Americans are purchasing garage kits so they can build their own this year. One of the more famous choices among consumers is garages made out of oak because of their versatility and resilience. However, any garage kit can sell quite quickly right now because of the growing need for it.
Prefabricated buildings sales are a growing one, and one that is growing because of the need for DIY choices today. So it’s a good sub-sector to enter right now, but an expensive one because of the expenses of a manufacturing plant. But if you have enough investors and a robust understanding of the market, this is one of the better sub-sectors of the industry right now.
The Future of the Industry
Right now, the industry is playing catch up. However, experts believe that the industry can recover once it has finished its backlog of projects that it has incurred because of the pandemic. It’s also believed that if the government decides to grow its infrastructure more, this means more projected revenue for the industry, which can drastically help its recovery in the coming years.
Only time will tell where the industry will head in the coming years. More firms have started to implement the necessary protocols for the pandemic. It is expected that the industry will recover in just a few years, given that the pandemic won’t get worse than what’s happening today.
