USA, CANADA & MEXICO are forecast to see overall negative or minimal GDP growth for the balance of 2020, down sharply due to COVID-19:
The good news is that the economies of USA, CANADA & MEXICO are starting to see a slow increase in activities as we move into the latter stages of 2020. In the USA, all of US States are now allowing construction to proceed. Safety & worker protection has really become a # 1 issue on construction sites in the last six months.
Owners / Operating Companies are reducing 2020 & 2021 CAPEX budgets anywhere from 10% to as much 75%. Unfortunately, this will translate into reductions in staffing levels across the Petro-Chemical, Energy & Power sectors. We are starting to see sizable numbers of Oil, Gas & Pipeline Engineers & Construction staff being let go as many planned or ongoing CAPEX projects are shelved or cancelled. Unfortunately, EPC Organizations & Construction companies are following the same path. It is estimated that between 20,000 & 50,000 Construction professionals well have lost their job due to the double whammy of low energy / oil prices & COVID-19 by the end of 2020.
Engineering & Architectural firms are reporting a dramatic fall off of new orders as we move into the 4th Q of 2020. Look for a substantial improvement in 2021 if an effective COVID-19 vaccine can be discovered & dispensed to millions of USA, CANADAIAN & MEXICAN citizens.
US construction labor costs should remain unchanged in the 4th Q of 2020. Open Shop hourly rates could see a decline of 2% to 5%, these rates are decided many time on what the local market will bear. Union hourly will remain fixed. However, the overall cost of labor on industrial type project will increase because it will take additional man-hours to complete the work effort. Construction productivity will decline, translating to more additional direct field and construction field in-direct man-hours.
Infrastructure, Residential & Commercial Construction is set to see a significant slowdown if this pandemic continues past September & October. COVID-19 will result in many cancelled or delayed projects, such as shopping malls, offices, hotels, airport, sports stadiums and other non-essential facilities. Oil & Gas facilities are expected to take a big hit in the remainder of 2020 & in the 1st half of 2021. The positive news with COVID-19 will be increased spending on Pharmaceutical, Bio, Vaccine production, Healthcare and R&D facilities for the remainder of 2020 and going into 2021.
Canada & Mexico construction sectors will experience a similar situation the US is experiencing, the construction sectors are set to contract by 15% to 25% for the remainder of 2020.
Quebec, British Colombia and Ontario a short time ago removed restrictions on essential construction work, which includes hospitals, pharmaceutical food production and essential manufacturing faculties. Mexico is still seeing a big increase in COVID-19 cases. Mexico is allowing essential and non-essential construction work to proceed in states that have few CONVID-19 cases. Many manufacturing and other industrial sectors can open up work activities if they follow pre-established Government social distancing, health and safety regulations.