The COVID-19 outbreak effected almost every industry in the world. In particular, the construction industry still suffers countless uncertainties.  Corporations have been shutting down all non-essential construction sites in response to the lack of materials, unavailability of subcontractors and overall global cost increases. Building homes has been a terribly slow and expensive process and commercial construction has dwindled.

Since 2019, constructions costs rose nationally two percent per year. The increase has only since grown due to the shortage of labor and the upsurge costs of materials. During the pandemic shutdowns, the shortage of labor was only the beginning of slowing down construction jobs. According to Omer Barnes, a CEO of Elite-Atlantic, a major construction company, many projects were delayed or canceled. Between the shortage of labor and fear of the Pandemic, many companies were forced to stop working all together and even some were directed to strictly manufacture supplies for to help defense again COVID-19. 

The hard choice construction companies face is when it comes down to it is enduring delays or seeking out costlier alternatives for materials, either way, the process becomes quite expensive. The commercial real estate industry shows thriving waves as the interest rates are continually getting cut, money and loans are easier to obtain, and cities are expanding at a booming rate. With owners and developers spending money on new construction, the subcontractor base becomes overactive, and prices start to increase. When the balance favors the subcontractors, the pricing is more controlled. As long as the real estate industry blooms, the costs of developer’s project rise and that’s not to mention the cost of materials.

The call for more real estate for home buyers and developers, and the rise in materials such as diesel fuel and steel pipe, many companies are calling for a pause on projects. Corporations are doing everything possible to seek affordable materials and working with subcontractors to stay on timelines. However, many construction projects for now, are interrupted or discontinuing globally.