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The Impact of the Pandemic on the Construction Industry and How It’s Adapting

Table of Contents

The COVID-19 pandemic has impacted various industries worldwide, and the construction industry is no exception. Construction industry members, including owners, developers, contractors, subcontractors, and supply chain vendors, have experienced varying degrees of impact as a result of the pandemic based on the various responses at the state and local levels [1]. This article will outline the impact of the pandemic on the construction industry and how the industry is adapting to the changes.

The Impact of the Pandemic on the Construction Industry and How It’s Adapting

Delayed Projects and Increased Costs

In April 2020, contractors reported that 40% of their commercial and institutional projects were delayed due to the pandemic. By July, the share of delayed projects had declined to just 26%, and the contractors in July were expecting it to drop further to 22% by Q1 2021 [3]. However, the cost of materials used for construction has increased during the pandemic. All materials have seen a hike in prices, but none as much as construction lumber, which has seen a 232% increase in price. This has impacted the cost of construction projects [8].

Increased Flexibility and Access to Talent

The pandemic has plunged the construction industry into the quickest and deepest possible experiment in flexible working, which has proved successful. The construction companies’ ability to adapt to these changes, and so quickly, could make the industry more accessible and attractive to a larger talent pool [2].

Recovery and Growth Potential

The COVID-19 pandemic has had a significant impact on the construction sector, which is sensitive to economic cycles. Yet, on the upside, construction holds much potential to stimulate recovery, thanks to its potential to create jobs; and in turn, recovery measures can support the sector’s transformation towards sustainability and digitalization [6]. Even though the pandemic negatively impacted 70% of construction companies, experts predict the construction industry will grow [4]. In fact, amid an ongoing housing market boom, the construction industry added 110,000 jobs [5].

Supply Chain Issues and Cost Fluctuations

The impact of COVID-19, the global coronavirus pandemic, has been swift, significant, and enduring, shaking up the supply chain in virtually every industry and inflicting considerable economic strain. Failures in containing the spread of the coronavirus may cause a rise in domestic building materials supplies due to the inability of suppliers to export to desired locations. At the same time, imports will also face similar issues, hence one can expect an unpredictable mix of price fluctuations [7].


The construction industry has experienced significant impacts as a result of the COVID-19 pandemic. Delayed projects and increased costs have been a major concern, but the industry’s ability to adapt to flexible working arrangements has allowed for continued operations. Additionally, the potential for job creation and growth in the sector has been identified, which could help stimulate recovery efforts. However, supply chain issues and unpredictable cost fluctuations remain a challenge.

As the world continues to grapple with the effects of the pandemic, the construction industry will need to remain adaptable and resilient to overcome these challenges. By embracing new technologies, focusing on sustainability, and continuing to attract new talent, the industry can position itself for continued growth and success in the years ahead.

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