Construction firms are being supplied with loan funds under the Paycheck Protection Program as the demand for their work continues to drop. But because of the infusion of this money, these businesses can hold on to their existing employees and in some cases, hire more employees. That’s good news that could lead to better news like new infrastructure funding.
According to the Associated General Contractors of America’s (AGC) latest weekly Coronavirus Survey, “44 percent of the 849 firms responding to the survey reported they had already received funds through the loan program, which began on April 3. Another 15 percent said their applications had been approved but they had not yet received funding, while 8 percent were awaiting a reply to their applications and 7 percent had applied but been told no more funds were available. Partly as a result of the loans, 13 percent of respondents said they had added workers.”
AGC chief economist, Ken Simonson said, “Most contractors report they have applied for the new federal loans, which are intended to enable small businesses to keep employees on their payrolls. This program has already delivered funds to nearly half of the survey respondents, and many of them have already brought back furloughed workers or added employees, even though more clients are halting and canceling projects.”
In announcing the results of the latest survey, the AGC reports “67 percent of respondents in the latest survey, which was conducted April 20-23, said they had encountered project delays or disruptions. Moreover, 49 percent said suppliers had notified them or their subcontractors that deliveries would be late or canceled. That percentage has risen each week since the association’s first survey, conducted March 17-19, in which 22 percent of respondents reported delivery woes.”
It is also wise to look ahead to when these Coronavirus days are behind us. AGC chief executive officer, Stephen Sandherr says, “The new federal loans are helping protect many construction jobs for now, but those funds are likely to run out well before demand for construction rebounds. The President and Congress need to start putting in place measures to revive our economy by rebuilding our infrastructure and restoring private-sector demand for construction.”
Here are the results for the AGC’s latest weekly Coronavirus Survey.
And here is more from AGC chief economist Ken Simonson.
