Coronavirus Impacts U.S. Construction Industry and Supply Chain

The construction industry has entered 2020 with many unpredictabilities. Things such as labor shortages are contributing to uncertainties in U.S. commercial building. In addition, the recent coronavirus outbreak is causing ruckus all over the world. Sickening and killing thousands of people, the virus has become a serious matter. While coronavirus is spreading internationally, it has severely impacted Chinese production and is devastating the global supply chain. So far, U.S. automative and airline industries have been affected. Unfortunately, the virus is also threatening the construction industry.

Construction Industry Supply Chain

The construction supply chain refers to the contractors and suppliers that contribute to making a project happen. With many processes such as planning, design, and construction, managing the supply chain can become a challenge. From the very start of a project, the supply chain plays a great role. Laborers must understand the source of all project materials as well as how to effectively meet deadlines. In relation to the supply chain, China is the largest single supplier to the United States. In fact, China imports nearly 30% of all U.S. building products. With coronavirus’s impact on China, this also greatly affects the United States construction industry. Many manufacturing factories in China are temporarily shut down, leading to delays in the supply chain flow. As a result, the U.S. construction industry may have to pay higher costs and determine temporary solutions.

“The American construction industry will not be immune to the coronavirus’ impact. For commercial builders that rely on Chinese-made goods or materials, this could mean higher material costs and potentially slower project completions.”

Richard Branch, Chief Economist for Dodge Data & Analytics

Coronavirus Leads to Shortage

Fortunately, at U.S. Bridge, we engineer and manufacture steel beam bridges in the United States. We believe that steel is the most sustainable material. However, many U.S. construction laborers import building materials, including steel, from China. Certainly, the coronavirus has led to a decrease in supply which may cause prices to increase across numerous commodities. Production lines in China are backed up due to quarantined workers and there is no transportation to deliver supplies from factories. Unfortunately, the demand for construction materials is at an all time high. Another concern due to coronavirus is delays in construction projects. This relates to its economic impact as well.

Moving Forward

As we continue to battle through this epidemic, the best we can do is hope for a speedy restoration and recovery. The worst part is uncertainty of how long the crisis will continue. For this reason, businesses must consider ways to diversify the supply base. This prevents future mishaps.

“When a company relies exclusively on a single country, the situation is like the concept of a corner solution, to use optimization terminology. We may want to avoid corner solutions.”

Expert in Operations Management & Business Analytics

Becoming more aware of risks can paint a more complete picture of the future. The construction industry must continue to take measures to move forward from the changes in the supply chain and industry as a whole. Visit U.S. Bridge online and contact us today to get a quote on your steel bridge.