March Construction Insider: Lobby against closures, wood industry’s ‘essential’ designation, more

March Construction Insider: Lobby against closures, wood industry’s ‘essential’ designation, more

March 31, 2020

Construction Insider is a monthly roundup of the latest news and insights in construction.

Construction groups lobby to keep working amid pandemic

Construction industry associations are pushing to continue working despite the ongoing spread of the coronavirus. WSJ

  • Industry groups and the US Chamber of Commerce wrote a letter to President Donald Trump last week to consider construction work “essential” and therefore exempted from quarantine orders.
  • The clamor has been successful in Illinois and California, but states like Pennsylvania and Washington have already ordered the closure of building sites.
  • The construction sector accounts for 4.1% of the country’s gross domestic product, and a nationwide shutdown could greatly impact the economy.
  • Construction groups’ plea to continue working emphasizes the need to balance between preventing the spread of the virus and keeping the economy intact.

Homeland Security declares forest and wood industry “essential”

The US Department of Homeland Security has declared the forest and wood industries as essential infrastructure that will continue operating as the country deals with the COVID19 pandemic. Woodworking Network

  • “This designation underscores the critical role that our…team members play in producing high-quality wood products [across] North America,” said Roseburg president and CEO Grady Mulbery.
  • States like California have adhered to the federal decision and allowed critical infrastructure sectors to operate while everyone else is ordered to “stay at home.”
  • Other sectors that have been designated as essential include healthcare providers, law enforcement, and transportation.

Builders clamor for “essential” designation for home construction

The National Association of Home Builders (NAHB) has called on Homeland Security to designate the construction of single- and multi-family dwellings as an essential business that must continue operating amid the COVID19 pandemic. Floor Daily

  • The 90 member organizations of NAHB jointly wrote a letter to Homeland Security Acting Secretary Jack Wolf asking for the “essential” designation, which they deemed necessary in stabilizing the housing industry.
  • “Construction of single-family and multifamily housing is essential to the economy and should be allowed to continue under a remain-in-place order,” said NAHB Chairman Dean Mon.
  • The housing sector accounts for 14.6% of the country’s gross domestic product, and shutting the industry down could disrupt supply chains and lead to negative economic repercussions, according to NAHB.

Demand for US, Canadian softwood lumber remains high – reports

The demand for US and Canadian softwood lumber is still high despite struggles to enforce social distancing policies among wholesalers and resellers, according to Madison’s Lumber Reporter. Lesprom

  • Both the Canadian and US federal governments have declared the lumber industry as an essential infrastructure business, allowing for its continuing operations while other sectors have been forced to shut down.
  • No restrictions were enforced on the delivery of trade materials in both countries, but logistical concerns have arisen as freight costs increase.
  • Late deliveries of goods have also been reported, but reports say that transportation has been going smoothly in general due to the decrease in transit volumes along major routes.

Homebuilding outlook dips as coronavirus spreads

Homebuilding outlook in the US is projected to decline as the economy slows down due to the pandemic that has forced the closure of home construction projects in most states. FCP

  • “Homebuilders’ 2020 results will be dampened by a meaningful slowdown in home selling during the second quarter 2020,” according to the latest report of Moody’s Investor Service.
  • Moody’s forecast also sees a possible 10% decline in homebuilders’ revenue for 2020 and a potential 19% dip in industry gross margins.
  • Home orders are suspected to dwindle in the coming spring, while cancellations of existing orders will likely increase, according to Moody’s report.
  • The report also notes that low interest rates and lack of oversupply could result in an increase in demand once the economy stabilizes in 2021.