Article source: ConstructConnect

There are currently two crises underway simultaneously. The advance of the novel coronavirus is taking a terrible toll in terms of physical and emotional well-being. At the same time, job losses resulting from ‘social distancing’ are sending the economy into a tailspin. To fight on both fronts, governments are advancing rescue packages of never-seen-before dimensions. Every day, the tremendous number of factors in play reconfigure in a new way. These ‘from the trenches’ notes attempt to shed some light along a murky pathway.
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Article source: ConstructConnect

• Traffic congestion in major cities has eased considerably. As a corollary, average driving speeds are faster. When the road ahead is clear, the temptation to put more pressure on the gas pedal is hard to resist. (This is not an endorsement of such a practice.) It’s odd to think that sometime in the future, driverless cars will show more discipline than humans.

• The humble parking lot, whether outdoor or indoor, is taking on a more important and expanded role in today’s economy. Real estate deals are being finalized in parking lots. Documents for signing are being passed back and forth through car windows. Then the pens are thrown away. (This is not an endorsement of such a practice.)

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Article source: ConstructConnect

• The last three weekly initial jobless claims numbers in the U.S. have gone from 282,000 to 3.3 million to 6.6 million. Furthermore, the horrendous increase in the count of people laid off and seeking insurance relief isn’t the whole story. Many companies that are continuing to struggle on are asking their employees to take pay cuts. The economy depends on consumer spending, which has just been gut punched.

• The good news: the arrival in New York of the USNS hospital ship Comfort. The bad news: the crowds of people, not all of whom were wearing protective face masks, that congregated to watch it come into port. The Big Apple has since come under tighter lockdown control.

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Article source: ConstructConnect

• CNN reported Wednesday night (March 31, 2020) that 350,000 retail workers had been placed on furlough since Monday (March 29, 2020), i.e., over a period of just three days. For an individual worker, a furlough may seem no different than a layoff at first, but there is an advantage. A furloughed employee will be able to qualify for unemployment insurance easier because he or she doesn’t have to prove they’re looking for a job. They still have one, even though it’s in limbo. For an employer, once the wheel spins fully around, it will be able to restore its workforce faster and without having to go through vetting hoops.

• In the Great Depression of the early 1930s, the U.S. unemployment rate soared to 24.9% (one-quarter of the workforce). In the Great Recession of 2008-2009, joblessness peaked at 10.0% (one-tenth of the workforce). Some analysts are projecting the unemployment rate this year, 2020, will reach 17.5%. Such a figure has the appearance of taking an easy route to the answer. It’s simply a calculation of the mid-point between 10% and 25%. As a ‘best case’ figure, 20% seems more likely.

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Article source: ConstructConnect

•  When the coronavirus crisis leapt up in China and many factories were closed due to worker shortages and to halt the spread of the disease, customers around the world were alarmed by the severing of component and final product supply lines. Now, it’s the other way around. Chinese factories are back up and running, but their customers have gone into hiding. Lockdowns in Europe and America have greatly cut into demand for China’s output. Seems no-one can catch a break these days.
• Except here’s a thought. Late last year, several of the largest milk producers in the U.S. slipped into bankruptcy due to a prolonged decline in the consumption of their product. Beverage tastes have been moving in other directions. But with so many families currently complying with instructions to stay in their homes for weeks and maybe months, perhaps there will be a resurgence in purchases of nutritious and low-cost milk.
• Canada and several American states have legalized recreational use of marijuana. It will be interesting to learn to what degree COVID-19 anxiety is impacting cannabis sales.
• Among the ‘things’ we shut-ins are buying over the Internet are computer hardware and software items (e.g., home-viewing entertainment packages) so that we can, in turn, buy more ‘things’ over the Internet. This is an instance of retail sales spiraling up, not down. Also, it’s sure to have implications for how most of us will perceive the world post-crisis.
• During the last period of extreme economic weakness, ConstructConnect’s grand total construction starts, in dollars, were -16% in 2008 and -18% in 2009. That’s a cumulative drop of -31%. Engineering starts weren’t adversely affected at all. The problem lay with non-residential building work and, even more, with residential groundbreakings.