USA, CANADA & MEXICO are forecast to see overall 1.0 % to 1.5% GDP Growth for the balance of 2020, down sharply due to Coronavirus:
The economies of USA, CANADA & MEXICO will slow down dramatically in the remainder of 2020, as these Governments wrestle with the impact of the Coronavirus on their economies. Regrettably, the Coronavirus has the potential for all planned or in progress construction projects to be delayed or worst case cancelled.
The US economy remained strong for the most part in the 1st Q of 2020. The 2nd Q is very uncertain as the US construction sector tries to come to terms with this virus. The first phase of a trade deal with China is a positive for the US economy & construction sector. The outlook for the US construction market is uncertain for the remainder of 2020. The industry is set to contract by 15% to 20% in 2020.
The US single / multi-family housing sector has been exceptionally strong over the last two years, we are starting to see a major slowdown as we move further into in 2020. The US commercial & infrastrure construction sector will experience a sharp decline if the current slowdown lasts more than 3 months.
The last two years has seen a construction boom in the US, this growth has been fueled (for the most part) by new housing, apartments, hotels / motels, offices, institutional, education, healthcare facilities, infrastructure & oil / gas facilities.
New York City is now the US epicenter of the Coronavirus Pandemic, look for other large US cities to see an uptick in confirmed cases in the next month.
A large number of temporary field hospitals are being built in New York City under the supervision of the US Army Corp of Engineers. The US Naval Ship Comfort arrived in late March to supplement New York hospitals with an additional 1,000 hospital beds. The Javits Center has been set up as temporary hospital with 1,000 + hospital beds.
Look for Modular, pre-assemblies, offsite pipe fabrication & pre-fabricated buildings to become more & more the norm in the US / North American Construction Industry, look for this trend to continue in 2020 & beyond. Modularization many times is cost effective versus “stick built” construction methods.
We have seen reduced demand for oil as a consequence of the Coronavirus Pandemic, in addition to the Russia vs Saudi Arabia price war is leading layoffs, unpaid leave, project delays / cancellations, & major capital reductions across all construction sectors. The US Oil / Gas & Energy sector is forecast to be especially hard-hit in the short term. At this time it is just about impossible to forecast the cost increases of Bulk Materials, Process Equipment & Construction In-Directs for the remainder of 2020.
Construction unemployment across the US will increase rather dramatically in April & May, however if the Coronavirus can be contained, look for quick rebound going into the 3rd Q, U.S. US unemployment prior to the outbreak of the Coronavirus was between 3.6% & 4.3%, some experts are predicting these percentages could increase to 10% or 15% – time will tell.
The Cuban Government has prohibited citizens from leaving the country. Schools and universities have been closed, and any remaining tourists are confined to their hotels.
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.