Although the construction industry appears to be looking more robust in the face of the COVID-19 threat than the hospitality and travel industries, it has not entirely avoided the downfall of the economy. Businesses and organizations refuse to invest in modernized and new facilities with the economy at a slowdown, resulting in ending the industry’s decade-long expansion last spring, and by the looks of it, the construction industry will not recover until well into 2021.
While the economy did slow down, if not shut down, in mid-March in hopes of limiting the spread of the virus, many expected that after the initial steep drop in economic activity, there would be an almost equal rise in recovery.
This expectation is due to the fact that May and June payroll reports revealed an additional 7.5 million net new jobs for the economy after chopping off 22 million in March and April. Almost 50 million individuals also applied for unemployment insurance benefits since mid-March and five million small businesses received over $500 billion in loans through the Payroll Protection Program (PPP) of the Small Business Administration.
Forecasters hoped that both circumstances were enough to boost the economy.
However, in mid-June, the economic growth stalled due to the spike in COVID-19 cases across many states, pausing and even reverting their reopening plans. Making matters worse, such new slowdown and potential reversal of the economic recovery come just when the supplemental federal employment insurance payments and required expenditure of the PPP loans are approaching expiration. With this, it is extremely doubtful that the economy will support self-sustaining growth anytime soon.
Still, economic conditions have constantly been instable since the beginning of the pandemic, and it appears that this volatility will continue for quite some time. There are upside risks and downside risks, though, that can both improve and delay the economic recovery.