Construction Insider is a monthly roundup of the latest news and insights in construction.
Senate OK’s additional PPP funding
The Senate approved a total of $310 billion worth of additional funding for the Payment Protection Program (PPP) on April 21, five days after the original pool of PPP funding ran out. Construction Dive
- The initial $349 billion PPP funding ran out on April 16, or 13 days after the program opened.
- The PPP served out loans to construction parties in need of financial assistance due to the coronavirus pandemic.
- Construction is still generally considered to be an “essential business” amid all the mandatory shutdowns, which may be why the industry continues to partake in loan programs, according to Kristen Swearingen of the Associated Builders and Contractors.
5 hold-out states allow construction work to resume
Five states that previously ordered the immediate shutdown of all construction activity have started to allow the resumption of home-building projects. NAHB
- Michigan, New York, Pennsylvania, Washington, and Vermont have all expressed plans to allow home construction to resume following the new “essential infrastructure business” designation announced by the Department of Homeland Security (DHS).
- The DHS designated single-family and multifamily construction as “essential” and the five states had started to adopt this federal guideline, even if the designation was not necessarily binding for each state.
- State-specific protocols are in place to ensure that the workers and surrounding communities are healthy and safe.
US construction industry leaders are expecting bleak economic prospects amid the COVID19 pandemic, according to the survey results reported by the Associated Builders and Contractors (ABC). CDR
- The reported data for sales, profit, and staffing expectations among contractors were all below a Contractor Confidence Index (CCI) of 50, which indicated unfavorable outlooks based on the ABC survey.
- The CCI values decreased from between February and March. The recorded CCI data in February were all above the 50 threshold, and the dip in contractor confidence was largely attributed to the ongoing pandemic.
- “Confidence is likely to decline further as construction industry leaders come to terms with the full extent of the COVID-19 crisis,” said ABC Chief Economist Anirban Basu.
Lay-offs sweep US construction sector
About 40% of US construction companies have laid off part of their workforce, according to the survey by the Associated General Contractors (AGC). Construction Index
- The widespread shutdown of construction projects resulted in lay-offs within construction firms, according to AGC data analysis.
- About 75% of construction firms are applying for Payment Protection Program (PPP) loans to sustain their payroll and financing needs.
- The AGC survey, which was conducted from April 6 to 9, also reported that 53% of construction firms were ordered to close their current projects or cancel projects that were due to start within 30 days.
- Project terminations have “caused a growing number of contractors to furlough or terminate jobsite workers,” said AGC Chief Economist Ken Simonson.
Softwood lumber prices recover from a two-week low
The prices of softwood lumber in North America have leveled back from the reported low prices around two weeks ago, in mid-April, according to Madison’s Lumber Reporter. CFI
- Economic changes brought by the pandemic caused losses for softwood lumber sales in mid-April, but prices have started to recover and are now on the same levels recorded in early April.
- It remains uncertain whether the prices will continue on an upward trend or if the improvement was short-term, according to the Lumber Reporter analysis.
- Many sawmills are still either closed or have limited operations. A number of sawmills that continue to operate are reportedly supplying the Asian market.