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Lay-offs grow in US construction

14 Apr 20 Latest analysis by Associated General Contractors (AGC) has found that 40% of US construction firms have reported lay-offs amid widespread project cancellations.

Ken Simonson
Ken Simonson

The survey found that more than half of firms have had projects halted as the economic impact of coronavirus grows.

AGC officials added that 74% of firms are seeking new Paycheck Protection Program loans and urged Congress to add more funding, among other recovery measures needed.

“Owners are not only halting many current construction projects but are canceling a growing number of projects that have not yet started,” said AGC chief economist Ken Simonson. “Inevitably, that has caused a growing number of contractors to furlough or terminate jobsite workers.”  

Simonson noted that that 53% of firms report they had been directed to cancel current projects or ones scheduled to start within 30 days in this week’s survey, which was conducted April 6-9.There was a steep increase in the share of firms reporting that an owner cancelled an upcoming project – from 7% in the previous week to to 19% in the latest figures.

In a new question, 11% of the survey’s 830 respondents reported that an owner had cancelled a project that was still in the preconstruction phase.

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In addition, 39% of respondents in the latest survey said they had encountered project delays or disruptions due to shortages of personal protective equipment such as masks for site workers, while 23% reported shortages of construction materials, equipment or parts. In the previous survey, which had combined those questions, only about one-third (35%) of respondents had reported equipment shortages.

The share of respondents who reported furloughs or terminations rose to 40% in the latest survey from 31% a week earlier. More than one out of three firms (36%) had furloughed or terminated site workers, while 18% had laid-off office or other workers.

Three-quarters of the respondents said they had already applied or intend to apply for the new Paycheck Protection Program loans. However, only 10% said they had already received a loan through the programme, which began on 3rd April.

“The construction industry is ready to rebuild our economy, but that can’t happen without strong federal support and investments,” said AGC chief executive officer Stephen Sandherr.

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