Effect of COVID-19 on Business

COVID-19 has changed the way we all do business, from manufacturers to contractors. In a year where we’ve all had to adapt, both to huge swings in demand and in terms of how our services are provided, contractors especially are adjusting to the new realities.

During August and September, HIRI surveyed 550 contractors to get their take on how COVID has impacted their business. These contractors primarily served the residential market and included:

  • Remodelers
  • Exterior contractors
  • Mechanical contractors
  • Finish contractors
  • Landscape contractors

The Impact of COVID on Contracting

It’s been a steep learning curve for everyone this year, and contractors are keeping an eye on the news as much as their clients. Nearly 90% of contractors who replied to our survey said they were, at the very least, concerned about COVID, with 46% of them saying they were very concerned.

While we hear anecdotal stories about demand being up since homeowners are home and itching to finally finish the basement or have a new roof installed, on their face, the numbers don’t seem to support this trend. Looking a little deeper we see a slightly different story.

Among our respondents, 80% said that the number of projects undertaken was similar or down, compared to the previous year, with 60% noting a somewhat or significant drop. Similarly, the value of jobs has stayed the same or gone down, with only 20% of respondents reporting increases since 2019, while 44% reported decreases. This is very likely true as many Pro businesses were shut down for a time in the spring, and ultimately they completed fewer projects this year. Since reopening, many businesses have seen tremendous activity.

Staying Safe While on the Job

In an industry with little to no opportunity to work from home, contractors have had to find ways to stay safe while still delivering their services. The use of virtual consultations has gone up, with 44% of our survey respondents saying they’re using these online conversations as a way to safely meet with new clients.

While on the job, 79% of contractors report wearing masks, while other precautions like increased cleaning and sanitization and working in smaller crews have also been adopted. More than half of contractors expect these precautions to continue for at least a year.

Still, most (65%) of the contractors we heard from said they were still comfortable entering a client’s home, in part because of this additional focus on safety. The vast majority (82%) of respondents said at least a few of the clients asked about health and safety protocols.

Keeping People Working

The earliest part of the pandemic was stressful for both businesses and families. With shutdowns across the country and plunging economic indicators, many individuals faced unemployment in the spring. 

Fortunately, contractors have been relatively well insulated, with only 30% of respondents reporting that they had to furlough workers as a result of COVID. The better news is that 82% of those contractors were able to bring at least some of those workers back as the year progressed.

Staying on Track

It was a tough year for residential contractors to keep their projects on track, even when regions were open for business as usual. Supply chain issues, like a lumber shortage over the summer, caused delays on a number of projects, with over half of respondents saying they experienced hold-ups getting their business materials.

Prices also appear to have gone up for many building materials: More than 50% of respondents said they were paying more for materials this year. 

Many contractors have also had to adjust how they buy their materials. About 30% of respondents are purchasing more of their building materials online, and half of online purchases are sent directly to the job site. Change doesn’t always need to complicate processes, and a combination of online purchasing and direct shipping is generally viewed positively.

What’s Next?

Unfortunately, there isn’t much hope for things to improve in the near term. Less than half of the responses received indicated that they expected things to get better in 2021. The greatest potential appears to be in maintenance and repair projects, with homeowners looking to keep their properties in good repair, rather than making large-scale changes.

More information on how COVID has impacted the residential construction and remodeling industry is available to HIRI members in our report: COVID-19 Concerns and Impacts on the Construction Industry, Fall 2020.

Contact HIRI for more information on becoming a member and to participate in future industry-related, relevant events.
Share this post:

Comments on "Effect of COVID-19 on Business"

Comments 0-5 of 0

Please login to comment