Industry adapting, but concerns remain: OCS survey
As contractors continue to operate their businesses and their work sites at full capacity during the COVID-19 pandemic, their concerns are focused on ongoing health and safety, worker availability, and taking steps to prevent a second wave.
These were the findings of the third in a series of surveys conducted by the Ontario Construction Secretariat. Held over a week in the middle of June, the survey asked more than 200 contractors from the province’s industrial, commercial and institutional sectors about the steps they are taking to adapt to the new reality forced on them by the pandemic, and the impacts of the pandemic to date on their businesses.
Contractors’ principal concern as they return to work is the potential for a second wave of COVID-19 cases in the province. Their second concern: ensuring workers’ health and safety. Of note is that since the second edition of the OCS survey, there has been a significant increase in contractors’ concerns over their ability to get skilled workers, and the impacts of supply chain disruptions. Other concerns included maintaining productivity while practising physical distancing, and the speedy approval of shovel-ready projects.
Asked about the extent to which their work had been impacted by the pandemic, only 28 percent said their work had been stopped at the time of the survey. That figure was down from 54 percent in OCS’s second survey and 64 percent in the first survey. Delays, however, remain a problem for contractors. Forty-one percent of respondents’ work was delayed at the time of the survey. One in three respondents said they have experienced significant delays in getting building permits processed.
Procurement is starting to trend in the right direction on the strength of more contractors saying they are doing more work than usual, and fewer saying they are seeing less bidding than usual. More than half of respondents said they are doing the same amount or more bidding than usual, compared to 38 percent at the time of the previous survey. Bidding is changing as a result of the pandemic. Nearly 90 percent of contractors reported that owners are now including new health and safety requirements on projects. More than half are also saying that there is a redistribution of risk sharing, and one in four saying they are issuing higher bids than usual to accommodate for pandemic-induced changes.
With relevance to worksite trends, 93 percent of contractors believe they are meeting enhanced sanitation standards on their sites and 42 percent of contractors consider the morale of their workers to have improved for that reason. Over two-thirds (68 percent) of contractors want enhanced sanitation practices to continue permanently and just over half (52 percent) of contractors have observed an increase in government enforcement of health and safety standards.
Some of the measures contractors have put in place to promote or maintain physical distancing include additional washroom facilities (45 percent), additional break trailers (30 percent), and adding more parking spaces to help workers avoid carpooling (26 percent).
Not surprisingly, revenue for the year to date, and revenue expectations for the year as a whole, are down. Nearly three-quarters (73 percent) of firms said they have less revenue compared to this time last year. The average loss was 29 percent. The same percentage forecasted less revenue in 2020. They expect to earn 23 percent less in 2020 than in 2019.
Contractors expect that project costs will increase by 13 percent due to the new personal protective equipment and physical distancing requirements. Some of the factors driving those costs include the need for additional equipment, adjustments to site production schedules to meet physical distancing requirements, time spent cleaning sites and equipment, and daily worker tracking and monitoring.
So how has the pandemic changed contractors’ thinking? The survey asked about new investments contractors planned to make. These included strengthening supply chains (45 percent), augmenting temperature checking capabilities (36 percent), digitizing processes (34 percent), strengthening or adopting collaboration tools such as BIM (27 percent), and adopting or increasing their use of modular and offsite construction (14 percent).
“It is now over 100 days since our lives were turned upside down by the coronavirus pandemic,” says Katherine Jacobs, director of research with the OCS. “Contractors by their very nature are born adaptors and this survey shows how the industry continues to adapt as it re-emerges from this global pandemic.
“Health and safety remains top of mind, but concerns of a second wave of shutdowns and more immediately, the supply of labour are weighing on contractors. Although far from normal, contractors are adapting to new requirements, seeking out new supply chains, bidding work and restarting delayed projects. It’s not business as usual, but the industry is adapting and looking forward to the announcement of new shovel-worthy infrastructure projects.”