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The Impact of Coronavirus on Construction: How To Prepare

The Impact of Coronavirus on Construction: How To Prepare


It's becoming increasingly clear that the impact of the novel coronavirus (COVID-19) will affect the construction industry in the United States in the coming weeks and perhaps even longer.

This development should come as no surprise: 30 percent of all construction materials used in the United States come from China, where the disease has resulted in significant numbers of factories to shut down. For example, virtually every lighting product has components manufactured in China. Other electrical products are equally impacted. This supply chain disruption will affect almost every kind of construction since lighting is basic to all projects. We have heard anecdotally about general contractors who have had steel and other products delayed in port for weeks. Even alternative materials such as wood may become harder to ship because of the disruptions in commerce.

As potentially more factories close, there will most likely be shortages of products and resulting increases in pricing. If the problem becomes serious enough, it may also impact labor, as contractors cannot work from home as may be the case in other industries. This is especially true in an industry facing a dwindling skilled labor pool.

While there is little that can be done in the short term to mitigate the consequences of the spread of the virus, we would suggest a few basic steps as best practices:

The bottom line is that those who do best in this difficult situation will be those who communicate well with their teams, have access to the most up-to-date information, are well-prepared in planning and, most importantly, are patient.

To discuss these issues and any other construction matters, please contact a member of Gould & Ratner's Construction Practice.

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