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Maine construction workers were allowed to stay on the job amid coronavirus-related restrictions, but a survey found that their hours declined by 10 percent toward the end of March as Gov. Janet Mills issued other limits on business activity.
The shorter hours were part of a hard knock on the nation’s construction industry, which lost 975,000 jobs, or 13 percent of its workforce, between March and April, according to a survey released last Friday by the Associated General Contractors of America, an industry group, and the technology firm Procore. They surveyed 800 companies online.
While construction and maintenance of essential infrastructure remained an essential business under Mills’ order, the contractors’ association said demand for construction deteriorated because of worker worries over getting or spreading the virus and investor worries that funds would dry up.
Matt Marks, president and CEO of the Associated General Contractors of Maine, said the work hours are important indicators of the industry’s health. He said the pandemic washed over the industry in phases.
The first red flag came when contractors doing mostly non-government work reported that investors in companies, restaurants or retail were pulling back on new site or expansion plans, Marks said. Some companies that construct buildings told him upward of 50 percent of planned projects were postponed or halted.
“Then we started seeing some public projects put on hold because they didn’t know what municipal revenue would look like,” Marks said, including water or sewer district projects whose big customers include breweries and hotel chains that have had business curtailed under the health restrictions.
Adding to the downtrend in construction is an expected shortfall to the state of about $125 million over the next 18 months from gas and diesel tax revenue because fewer trucks and cars have been on the road during the pandemic, he said. The Maine Turnpike traffic alone saw about half its regular traffic in March.
“Overall, there are very serious ramifications for the construction industry,” Marks said.
More than 36,000 construction workers, or a little more than 5 percent of Maine’s employed workforce, held jobs at close to 5,700 businesses in the third quarter of 2019, before the coronavirus hit, according to the Maine Department of Labor. The $2.4 billion industry contributed 3.7 percent of Maine’s gross domestic product in 2018, Marks said..
Nationally, the story of delayed projects and fewer work hours was similar. Ken Simonson, the chief economist for the national association, said two-thirds of survey respondents noted that owners have halted projects that were underway or canceled upcoming work, up from 39 percent at the end of March.
Future projects as late as June or beyond were canceled because construction company owners thought they might not have enough funding. That resulted in one-third of companies nationwide laying off employees.
Simonson said the data underscore the need for federal measures to help the construction industry recover, including infrastructure funding, safe harbor provisions to prevent coronavirus-related lawsuits and clarifications for how to use the federal Paycheck Protection Program forgivable loans.
“Without new federal help, it is hard to see a scenario where the construction industry will be able to recover any time soon,” Simonson said.
Simonson said 12 percent of firms report they plan to make additional layoffs within the next four weeks.
He said reductions were particularly severe in the Northeast, where 53 percent of firms terminated or furloughed employees. The association did not have detailed breakdowns of state data.
Still, the survey found some upsides. In Maine, hours worked declined by 5 percent on April 27 compared to March 1, which was a smaller decrease in hours than at the end of March. Mills issued an initial round of restrictions in March on public-facing businesses and later ordered Mainers to stay at home.
The federal stimulus helped the industry. About a quarter of the companies nationwide have been able to hire workers because some 80 percent of survey respondents had received forgivable loans under the federal Paycheck Protection Program, Simonson said.
Construction work also is beginning to pick up again as some of the restrictions that kept many businesses shut and consumers at home during April were lifted as of Monday, when retail stores in 12 Maine counties were allowed to open under health restrictions.
On Tuesday, the Maine Department of Transportation announced several construction projects, including a $712,000 improvement to a Kingfield intersection, a bridge replacement in Houlton and a road improvement in Waterville.
Watch: How Bangor emergency crews are adapting to the pandemic