COVID-19 Trends and Hot Topics

2021 Forecast: Construction Continues to Improve but not Without Uncertainty

by Michael McDonagh

After 10 months of a deadly pandemic, the question on everyone’s mind is where construction is headed for the next one to two years. Without getting into any guesswork, construction in Massachusetts has proven its resiliency since the start of the pandemic.

Dodge Data & Analytics recently predicted that nationwide construction will grow 4% in 2021. This follows a year where construction dropped 14% due to the pandemic. Market data closer to home continues to show improvement. According to data from the state Department of Unemployment Assistance, statistics show that construction is back to 90% of the employment level from we where we stood in February.

ASM Members Remain Busy

Bright spots for local construction include the ongoing growth in lab development. This includes not just Boston and Cambridge but growth along the 128 belt.  Warehouse development (think Amazon distribution centers) is also proving to be a positive area for growth. These are certainly bright spots for the next several years and will help offset what is likely to be a slower pace in traditional office space development.

The return to the office as we knew it pre-pandemic is rightly causing owners, developers, and investors to question the future of office space. Adjusted work habits such as remote work is certainly here to stay, but that does not mean the end of the office. Workers will return, likely at a gradual pace, depending on the availability and effectiveness of the COVID-19 vaccine. In a recent survey by the Massachusetts Competitive Partnership, local companies report that they expect about half of their workforce to return by July 2021, and over 80% to return by 2022. This is good news for future construction and the overall health of our economy.

Those who perform public construction were greeted with positive news recently when the Commissioner Gladstone of the Division of Capital Asset Management and Maintenance (DCAMM) informed ASM members that state capital budgets were not being reduced. Public Construction remains a key sector and those not already certified by DCAMM to perform this work were encouraged to consider it.

Strong Safety Protocols to Avoid More Shutdowns

To this point the winter surge in COVID-19 cases has not led to more shutdowns in construction. We know that keeping jobsites going is important to state and municipal officials, but worker safety is, and must remain, the priority. The fact that construction has not had more shutdowns is due, in large part, to the strong safety protocols put in place by the construction industry.

We recall that from March 16 to May 18, some construction in the state was shut down. Boston, Cambridge, and Somerville were closer to a complete shutdown. It was March 10, 2020 when the Baker-Polito administration declared a state of emergency urging private sector employers, where possible, to limit or eliminate non-essential travel and larger meetings. This was understandable in the early stages of the pandemic and allowed time to put adequate safety measures in place. But the industry has adapted since those early days. Worksites now have protocols for social distancing, proper hygiene, testing, and more. PPE is more readily available than it was in the spring.

The COVID-19 pandemic has had a tremendous impact on construction in Massachusetts and the surrounding region. We all know the ups and downs we have experienced since March. Through all the challenges, ASM members have remained resilient and have dedicated themselves to adapting to the new normal of construction. Although we sometimes wish we could hit the fast-forward button, the future of construction remains bright for Massachusetts.

Michael McDonagh

Michael McDonagh is CEO of Associated Subcontractors of Massachusetts.