D.C.'s Construction Industry and COVID: Where Do Commercial Builders Stand?

Historically, construction in D.C. has been relatively stable. Even in times of economic downturns, the city typically experiences faster recovery than other U.S. metro areas. Despite periodic lulls, such as the 2008 Great Recession with construction jobs bottoming out by 2015, stability returned to the District.

Once COVID-19 hit, the commercial construction sector experienced a mixed bag of results. Reports ranged from significant slowdowns to having "mild impact."

Let us take a look at how D.C.'s commercial construction sector performed before, during, and what it'll likely look like after the COVID-19 pandemic is over.

Before the pandemic

Pre-pandemic the industry experienced a labor shortage with more jobs than workers in the local commercial construction market, especially with the demand for builds. In fact, in 2017, construction in D.C. was "moving full-steam" ahead. For instance, tens of thousands of residential rental units were in the process of being built with significant expansion in the NoMa/Union Market, Capitol Riverfront, and Southwest areas. Numerous transportation expansion projects were in the works, including the Silver Metro, Reagan National Airport, and the huge "Transform 66 Outside the Beltway" project; all of which have continued through the pandemic and are ongoing.

During the pandemic

Construction took an initial hit once COVID-19 spread within U.S. borders. D.C. was no exception. Everything was locked down while officials decided what to do. This hiatus was brief. Soon, D.C.'s Mayor Bowser, Virginia's Governor Northam, and Maryland's Governor Hogan declared construction to be an essential industry.

Despite a slow start to the year, this did not seem to drastically impact job opportunities in D.C. In May, the U.S. Bureau of Labor Statistics (BLS) reported most construction job subcategories primarily showed increases. Looking at other statistics, employment within the umbrella category of "Mining, Logging, and Construction" in D.C. stayed relatively steady from February 2020 to April 2021 with an overall 1 percent increase in jobs.

Commercial construction workers were kept busy, but they had to cope with new on-the-job stresses.

• Office staff working remotely where possible and transitioned routine tasks online.
• Workers on construction sites following strict COVID-19 protocols that included social distancing, staggered schedules, masks, and frequent sanitizing.
• Planning and sales employees pivoting to utilizing videoconferences and other digital tools.

While jobs remain available in the commercial construction sector, it has taken a financial hit. In July 2020, Dodge Data & Analytics, a provider of commercial construction project data, reports commercial and multi-family projects in D.C. took a 42 percent loss during the first half of 2020. This is attributed to generally low demand for offices and luxury housing, along with space in the hotel and retail sectors. Other commercial sectors, such as healthcare, transportation, and warehouses kept construction employees working.

Looking toward the future

Many companies indicate they plan to continue integrating technology as it is turned out to be a good cost-saving measure. Despite some projects being halted or delayed, contractors in the commercial space are optimistic about the future but recognize they will still face challenges associated with a shortage of supplies and skilled workers. In a recent survey, 85 percent of contractors indicated "moderate to high levels" of difficulty finding skilled workers in Q1 of this year; this is a 2 percent increase from Q4 2020. Furthermore, BLS projects:

• Construction managers will see an 8 percent increase in jobs through 2029 (much faster than average).
• Construction laborers and helpers will see 5 percent job growth through 2029 (faster than average).
• Construction and extraction jobs are projected to grow 4 percent through 2029 (about as fast as average) with 296,300 new jobs being added.

If national projections are any indicator, chances are, individuals looking to get into this field will find ample job opportunities in the D.C. Metro area. Once the short-term challenges are overcome, experts predict the industry will flourish. Furthermore, other ambitious large-scale projects have been pitched by developers. If they go forward, they will keep the local commercial construction industry booming in the future.

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