Construction Roundtable: Insiders View of the Impacts from COVID-19 and the Economic Slowdown
Prior to the Global Pandemic, the construction industry in the Upstate was hitting on all cylinders with business strong in most sectors. Since the start of the pandemic, the construction industry is still going strong in some sectors, but there are others in which projects have slowed or stopped. We asked representatives from four local companies: Todd Horne from Clayton Construction, D.J. Doherty from Mavin Construction, Joe Pazdan from McMillan Pazdan Smith Architecture and Neal Workman of Trehel Corporation, to provide us with an insiders view on how things are looking as we move towards the final quarter of 2020.
Q: In what ways, if at all, have you seen your business impacted by the pandemic?
A: Joe Pazdan: The pandemic has significantly impacted the way we work. I am accustomed to having my team close at hand, with impromptu conversations and quick charrettes or design reviews that took a few minutes without scheduling. Collaboration now has to be intentional and often scheduled so for me, I have had to learn to work differently.
More importantly, I miss our team and the culture we have built taking care of one another. I miss experiencing the daily joys and struggles of the individuals in our firm from being together in the office.
Neal Workman: On a national level, we have witnessed investor and market insecurity, which trickles down and directly impacts local economics. At Trehel, we have experienced a disruption of decision-making, which has led to a “wait and see attitude” with projects being delayed and impacting new business procurement. The pandemic has created a heavy demand for our technology dependency and prompted us to continue expanding our capabilities.
There have been positive benefits as well; the unusual circumstances have allowed us to express care to our employees in new ways. We have adopted flex schedules, workflows, new processes, and the expanded use of communication tools, which otherwise may have been overlooked until they became a necessity.
Todd Horne: The biggest impact Clayton Construction has seen from the pandemic is our ability to congregate, converse, and work in what we knew as the traditional office environment. For all work, but especially in construction, an ability to meet with our clients and team members to review items from design coordination to product delivery is paramount. We have had to adapt from our traditional approaches and get creative with the implementation of technology to ensure we are operating as efficiently and cost effectively as possible.
Q: What unexpected impacts have you seen—good or bad—on the construction industry?
A: D.J. Doherty: Safety on a jobsite is always a primary focus throughout any type of commercial project, with an emphasis of constantly looking out for others on the site. The Covid pandemic created a shift in some ways because any failure to follow guidelines put others at risk. This shift was a recognizable awkwardness at first but quickly transitioned into much more of a comradery and recognition that those we work alongside can have just as much impact on your health through their actions as you create with your own. Personal boundary lines became much more well defined and who was allowed within them was scrutinized more diligently. While this could have created added tension, it also provided an opportunity to instead strengthen the bonds with those in our inner circles. It encouraged a new emphasis on how the risks of personal choices/actions can convey to everyone around us. While it could have been divisive, we have instead seen Covid serve as a rallying cry for the safety of the whole team. The personal relationships between those working together daily have been strengthened and are flourishing with trust and accountability. The cultural health of the team is no longer described as an idealistic goal but embraced as an expectation and starting point for individuals to be part of that team and enjoy it’s culture, knowing how to contribute by enhancing and strengthening each personal relationship.
Todd Horne: Clayton Construction has seen several unexpected impacts due to the pandemic. Our team has remained vigilant in mitigating the outbreak. Specifically, we have developed a COVID-19 Exposure Prevention, Preparedness, and Response Plan that has been implemented throughout our company and jobsites.
Another impact to our industry has been manufacturing plant shutdowns, material shortages and/or material delays resulting from the pandemic. All of this has made scheduling and coordination a challenge on projects where you are forecasting delivery/turnover sometimes 12 to 18 months in advance.
Although we have experienced some challenges, our region is still seeing a tremendous amount of growth and we are confident that the construction industry will continue to thrive in the Upstate.
Neal Workman: Since the industry was considered essential, projects have continued to progress at a somewhat normal pace without lengthy shutdowns. We have embraced online communication technologies, such as Zoom, that allow us to hold meetings virtually without exposure to the virus. While this has been effective, we have sacrificed the personal connection and collaboration, which historically has been vital to our business practices.
One of the most significant challenges has been managing the emotional “fear” of workers on our jobsites versus adapting to the pandemic’s real threat. In addition, we have experienced delays in deliveries and price increases, especially related to wood products due to manufacturing facilities either closed or operating with limited production capacity.
Q: In what ways is the building industry uniquely positioned to play a part in the economic recovery of the Upstate?
A: D.J. Doherty: The construction industry has enjoyed significant growth in the years leading up to the pandemic. To support this demand most companies expanded their capacity, improved internal processes and learned how to work smarter. The urgency of every project seemed to be ratcheted up , and delivery models for projects shifted with design build, partnering and CM@R arrangements becoming much more frequent. The Covid pandemic placed much of the industry in a place of uncertainty about what the future holds and some adjustment was required by many to adapt to less opportunities and in some occasions reduced urgency. The capacity and ability of the industry are still intact across the Upstate and Covid has provided just enough of a break that much of the industry completed the strategic initiatives for improved processes and better communication. These initiatives were longer term goals but were quickly achieved out of necessity to survive, and will serve the Upstate well with an improved ability to move an idea or need from concept to shovels in the ground in the most efficient way possible. The pandemic has hurt but also provided for better/stronger/wiser/faster processes that support recovery at record breaking pace.
Q: In what business sectors are you seeing the most activity? Are there any that surprise you? Please explain.
A: Joe Pazdan: Industrial has strengthened for the time being – eCommerce was already significant, but much more important now with so many working from home. Seeing distribution, warehousing and also manufacturing continue to invest.
Need for healthcare facilities still strong, but has had some fits and starts as they have been focused on fighting the virus and a downturn on revenue due to lack of surgeries. Seems to have settled and projects continue – it has been remarkable how our healthcare administrators and professionals have weathered through this storm.
Hospitality, retail and civic work is slower for us.
The loss in higher ed investments – a market that has been very stable, surprised us. We admire the college and university presidents, along with K12 superintendents who have had to manage through this effort and wonder how this will impact long term investments.
Seems to be a lot of institutional money on the sidelines and developers continuing to look for new opportunities.