Construction in southeast Michigan has come to an abrupt halt for many ABC SEMI contractors amid the COVID-19 shutdown. How will this impact construction projects for members differently?
In late March and early April, ABC called all contractor members to see how they were faring and offer any assistance they could. Surprisingly, roughly half of those members contacted were still conducting business, although many with skeleton crews and reduced manpower. Of those working, the vast majority were engaged in “essential” projects, an ambiguous definition that created a wide variation of company responses as to whether they could continue with construction projects.
Even with the approval to work on projects deemed “essential” some contractors didn’t feel the work is worth risking their employees over. ABC State Chairman and owner of Robert Clancy Contracting, Inc., Robert Clancy decided to send his team home as the pandemic reached Michigan.
“I am certainly mindful of the need for our team to work and support their families,” said Clancy. “But I want to make sure that they are protected and healthy for the future. The stress of worrying that you might bring this virus home and infect your family was simply not worth the risk. We will do everything we can to help them through this and see that we all work together again when this is all over.”
ABC was aggressive from the outset about helping member companies survive the pandemic. They hosted a series of Zoom conferences on topics like helping companies understand if they meet the definition of “essential services.” They also shared information on the Small Business Administration forgivable loans and provided free legal advice from the law offices of Barnes and Thornburg and Butzel Long.
Experts say the fallout from the COVID-19 virus is one more factor poised to affect construction firms. Experts said the pandemic will have ramifications on three major areas for construction in southeast Michigan:
Employee Health and Safety
First and foremost, companies in affected regions say they are concerned with employee well-being. ABC of Michigan sent a letter to Gov. Whitmer on March 27, supporting her stay-at-home order that shuttered many construction companies. While encouraging a shut-down of construction projects appears at first blush to be counter to the interests of individual companies and the industry at large, ABC SEMI CEO, Keith Ledbetter, cautioned that history wouldn’t be kind to company owners who acted from a short-term perspective, while potentially risking the health and safety of their employees.
ABC’s safety director, Kim Gamet, is telling ABC members that if they must work, they should use good hygiene including frequent handwashing, covering coughs, avoiding touching your face and social distancing. She also suggests additional safety training for employees before heading to projects.
Gamet is providing remote online instruction for first aid, CPR and OSHA classes for ABC companies who want to sharpen the skills of their employees during the down time.
Material/Supply Delays
Many local supply houses shut down after Gov. Whitmer’s stay-at-home order, even some who serviced essential industries. In addition, Chinese government containment efforts and quarantines meant that commercial builders that relied on foreign-made goods or materials experienced supply shortages within just a few weeks of virus exposure in the United States. It’s unclear what kind of delays will result as the industry begins a ramp up in projects commencing in early summer.
Concerned Clients and Owners
ABC SEMI Membership Director, John Manor is finding that the most devastating consequence of the COVID-19 virus is the uncertainty it creates in customers who are contemplating projects. He said that financing may dry up for new projects and customers may table current projects until the uncertainty passes.
Past national crises have shown historic decreases in construction financing and a greater focus on risk mitigation and conservative underwriting. Even with historically low interest rates making this the perfect time to finance a project, not all owners may be willing to take on the risk.
“I am already hearing the discussions among our members that they expect to see higher priced projects reduced and some canceled,” he said.
ABC members can monitor developments and research guidance about the coronavirus pandemic at abcmi.com/News/COVID-19 and abc.org/coronavirus and access emergency preparedness and response resources, including COVID-19 safety materials, toolbox talks, sample project shutdown/startup procedures, and sample small business continuity plans.
