Survey says: Supply chain challenges, increased costs and decreased revenues part of the new normal for construction industry

Ontario Construction News staff writer

Contractors are taking steps to manage the impact of COVID-19 while the threat of a second wave of the virus is causing concern, according to the third in a series of surveys conducted by the Ontario Construction Secretariat.

The Coronavirus Contractors Survey: Re-emergence and Adaptation was conducted from June 16 to 19, with Industrial, Commercial, and Institutional contractors from across Ontario. 

Surveys provides insight on how the construction industry is adapting to new safety guidelines related to the coronavirus pandemic and found the top concern of contractors is the potential of a second wave of COVID-19, followed by the continued unease in ensuring the health and safety of their workers. 

Since the second survey was released in May, respondents have become significantly more concerned about their ability to obtain skilled labour and deal with supply chain disruptions. In fact, little improvement has been reported in supply chain issues caused by the coronavirus since the first survey in this series (April 22 – 29), with close to two-thirds of contractors still reporting a medium to high impact. 

“Although far from normal, contractors are adapting to new requirements, seeking out new supply chains, bidding work and restarting delayed projects,” said Katherine Jacobs, director of research.

Contractors now report that on average, only 28 per cent of their activity was halted and just 5 per cent of contractors reported all their construction activities were still fully stopped. Delays to forthcoming work are taking longer to lift, with 41 per cent of projects scheduled to start this year being delayed and one third of contractors experiencing significant delays in processing building permits. 

Procurement trends are also affected – contractors are starting to bid on more work with 53 per cent now reporting the same level or more bidding than usual, up from 38 per cent in the last survey.

Also, 88 per cent of contractors noted that owners are now including new health and safety requirements on projects. On worksites, 93 per cent of contractors believe they are meeting enhanced sanitation standards and 42 per cent consider the morale of their workers has improved as a result. 

Over two-thirds, 68 per cent of contractors want enhanced sanitation practices to continue permanently and 52 per cent have observed an increase in government enforcement of health and safety standards. 

The construction industry has taken a significant blow financially as a result of the pandemic, the survey concludes, with about three-quarters of firms forecasted reduced revenue in 2020. Many are now forecasting a 23 per cent fall on average, and project costs are expected to increase by 13 per cent  due to the new PPE and physical distancing requirements.