Virus Impacting Residential Construction Industry

The National Association of Homebuilders’ (NAHB) latest survey revealed that 93% of respondents said COVID-19 has impacted the traffic of prospective buyers. 

Responses for the survey were collected online between March 24 and March 30. The largest share of responses came from single-family home builders. 

Following traffic of prospective buyers, 89% of respondents said the virus was having a noticeable impact on homeowners’ concerns about interacting with remodeling crew, and 86% said inquiries about remodeling have been impacted. 

Additionally, 64% of respondents said the virus has impacted the willingness of workers to report to a construction site—an increase from 42% the prior week. Every region increased when compared to the prior week. 

The midwest reported the largest increase in the issues, rising from 40% last week to 73% in the current survey. 

COVID-19’s impact was felt in Friday’s jobs report, with the U.S. Bureau of Labor Statistics revealed the unemployment rate rose to 4.4% with total employment declining by 701,000. 

The reported increase of 0.9 percentage points in March is the largest month-over-month increase since January 1975, when it rose by the same margin. 

First American Chief Economist Mark Fleming called Friday’s report, “a shock to the services sector this large is like nothing we’ve ever seen before.”

“While many stay-at-home orders exempt construction, housing is not immune. Homebuilding and remodeling lost 4,500 jobs,” Fleming said. 

Odeta Kushi, Deputy Chief Economist at First American said on Twitter, “this is an additional headwind to builders who were already facing labor shortages.” 

The NAHB reported that residential construction lost 4,300 in March following an increase of 24,100 in February. The NAHB says residential construction employment now stands at 3 million in March.

The Bureau’s report comes 24 hours after the U.S. Department of Labor announced jobless claims doubled to 6.6 million for the week ending on March 28—an increase of 3.3 million. 

Despite the passing of the $2.2 trillion CARES Act, Tendayi Kapfidze, Chief Economist at LendingTree, said these claims represent a significant loss of income to many Americans and disrupt their ability to meet financial obligations.