What’s Trending in Construction: September 2020

We’ve found amazing optimism and growth as our economy roars back from an unprecedented national shutdown. Capitalism is answering the call in support of socio-economic shifts at an unprecedented rate, Federal and state governments are investing heavily in infrastructure to support the return to a booming economy, and construction is playing a major role in both.

Here are some articles worth reading about.

Amazon To Add 1,000 Warehouses in the Suburban US

Amazon.com Inc. plans to open 1,000 small delivery hubs in cities and suburbs all over the U.S., according to people familiar with the plans. The facilities, which will eventually number about 1,500, will bring products closer to customers, making shopping online about as fast as a quick run to the store. It will also help the world’s largest e-commerce company take on a resurgent Walmart Inc.

Amazon couldn’t fulfill its two-day delivery pledge earlier this year when shoppers in Covid-19 lockdown flooded the company with more orders than it could handle. While delivery times have improved thanks to the hiring of 175,000 new workers, Amazon is now consumed with honoring a pre-pandemic pledge to get many products to Prime subscribers on the same day. So with the holidays approaching, Chief Executive Officer Jeff Bezos is doubling down by investing billions in proximity, putting warehouses and swarms of blue vans in neighborhoods long populated with car dealerships, fast-food joints, shopping malls and big-box stores.

Read the Full Article on Bloomberg.

State Department Embassy Building Program Continues Busy Pace

As the State Dept. office in charge of embassy construction adjusts to workplace changes caused by the coronavirus pandemic, it has continued to award a stream of construction and design contracts for new projects at posts around the world.

Addison “Tad” Davis, director of State's Bureau of Overseas Buildings Operations (OBO), says that during the past six months, the department has awarded contracts for seven major construction projects valued at more than $445 million, plus 11 architectural and engineering services contracts totaling about $28 million.

Speaking at the annual meeting—this one virtual—of the bureau's industry advisory panel on Sept. 22, Davis reported that in fiscal 2020, OBO completed nearly $5.3 billion in new construction or rehabilitation work.

It also has obligated $5.2 billion for additional projects and, looking ahead, has sent out 13 requests for proposals for other major embassy and consulate projects.

Read the full article on the Engineering News Record. 

Construction Scores a Hat Trick: Starts, Jobs, Backlog All Rise

  • New data turned heads last week when new construction starts, jobs and backlog all notched solid gains to provide a glimmer of hope for the industry, following a summer of worrisome trends that emerged in the immediate aftermath of the COVID-19 pandemic.
  • Nonresidential building starts rose 16%, while nonbuilding construction — which includes infrastructure projects — jumped by 40% in August, according to Dodge Data & Analytics. By the end of July, the industry recovered 59% of the jobs it had lost, according to New York City-based accounting firm Marcum. In even more good news, backlog rebounded to eight months in August, according to Associated Builders and Contractors (ABC).
  • The numbers indicate that construction has rebounded from the negative effects of the coronavirus pandemic more than any other U.S. industry, according to economists associated with two of the reports.

Nevertheless, the good news came with a dose of caution: “While there are reasons to believe that the months ahead will present challenges for nonresidential construction — including tighter credit conditions, weak state and local government finances and elevated commercial vacancy rates — the August data provided a much-needed respite from gloom and doom,” said Anirban Basu, chief economist at ABC in a statement.

The triple shot of positivity comes in stark contrast to a series of economic reports this summer, which showed starts, jobs, backlog and profitability in the nonresidential construction sector all tumbling due to projects being put on hold or canceled due to economic uncertainty caused by the pandemic.

It also provides evidence that construction’s essential status helped the industry maintain momentum during the darkest days of government-ordered shutdowns, which has enabled it to bounce back faster than other industries, according to Basu and Joe Natarelli, national construction industry group leader at Marcum. Construction’s 8.9% unemployment rate comes in lower than the national average of 10.2%.

“The industry has rebounded faster than any other economic segment,” said Natarelli, in the firm’s second quarter Commercial Construction Index report. “If an infrastructure bill gets approved in the near future, we can look forward to long-term growth for the construction industry.”

Read the full article on Construction Dive.

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