05/15/2020

Nailing Down the Costs of COVID-19 on Construction

Following the various newsletters and law firm emails of the past two months, discussions and alerts abound over the impact of COVID-19 on construction activities, including suspensions, shutdowns, material supply disruptions, social distancing and lost productivity.  In addition to our coverage here, WPL Publishing recently produced several webinars on the subject, including detailed discussion of suspension and lost productivity impacts. To-date, the focus has been on identifying the impacts, but little has been seen on actually quantifying the impacts.  However, we did stumble recently on a very comprehensive report by John McConville of Compass International, a well-known construction estimating firm, covering several specific cost items as well as some general sense of the current overall economic hit to construction and the outlook and shape of a likely rebound.

 

For starters, McConville reports that contractors are anticipating a 10%-20% increase in field labor hours.  McConville sees the costs of N95 masks, disinfectant, disposable gloves, temperature checks, hand sanitizers and the possible need for additional onsite compliance testing staff could be a cost similar to small tools and consumables – an additional $2.25-$3.50 per direct construction man-hour.  And this does not include possible new facilities such as larger temporary lunch tents, changing rooms and temporary field offices to comply with social distancing requirements.

 

McConville also weighs in on the financing, the supply chain and unemployment rates, but sees a bright spot as construction may offer an opportunity in the not too distant future to offer work for those laid off from other industries.  Low oil prices and low interest rates may also help to stimulate construction growth as COVID-19’s impact winds down.  For the complete article, see Impact of COVID-19 On Construction - Reopening the Economy - the Next 3 Months Part 1.

 

Webinar alert.  WPL Publishing just released the date for a special Pricing COVID-19 Lost Productivity Claims featuring productivity cost experts Bill Scwartzkopf, Don Harrington and Dave Halligan, Ph.D. – put May 28 on your calendar.  For more information or to register, click here.  [Construction Claims Advisor subscribers – don’t forget to use your 20% member discount code.]

 

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