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Challenges of Covid-19 in Construction Industry

Labor shortage, shrinking backlog, decreasing construction costs, less work, price increases, issues in the supply chain, and diminished government revenues

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Covid-19 in Construction Industry


Even after a year since the first COVID-19 case was recorded in China, many businesses continue to be affected by the looming pandemic. The commercial construction industry is no different. Many contractors in the world have been challenged with a variety of problems over the past year, not only with the shutdown of projects but also with employee layoffs and rise in the cost of construction.


As 2020 ends, industry experts and economists predict that these issues will continue to be a problem in the following years. Seven of which are to be watched out for: labor shortage, shrinking backlog, decreasing construction costs, less work, price increases, issues in the supply chain, and diminished state and local government revenues.

The issue with labor shortage is no longer surprising as during the pre-pandemic times, the industry is already experiencing a shortage in skilled labor. This continued to loom over the heads of construction contractors despite the slowing, if not shutdown, of projects.

The backlogs in projects have also significantly declined in 2020 and is revealed to be accelerating across all the markets in the country. Apart from these, the cost of construction had surprisingly dropped for the first time since 2010, an impactful hit to the profits of many contractors.

Because of the work-from-home setup and travel restrictions, there will be no urgent need for new office buildings, hotels, and event spaces in the meantime. This, in turn, results to less work and drop in profits for many construction firms. Another major player in the decline of profits for firms is the rising prices of construction materials across the globe.

Read more  Covid-19 Makes Your Engineering Clients Less Able & Less Willing to Spend than Before

Although contractors are expanding their network as a response to this issue, they still face the problem of delivery and availability of materials due to the strain in the supply chain.

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Robert Bagatsing
Managing Editor and Founder of GineersNow based in Dubai and Manila. Survived marketing at Harvard, Management at AIM and proud Bedan.


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