By Kristi Waterworth
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You’ve probably already heard a lot more than you want to about the coronavirus outbreak originating in Wuhan, China. COVID-19 symptoms (and confirmed cases) are popping up in pockets across the US and Canada and things like medical masks are selling out without sufficient manufacturing labor to keep new supplies coming. According to the World Health Organization, we’re facing a global outbreak of a new mutation of a known virus, but it’s not yet a pandemic.
All of that is well and good, but what does it mean for the construction industry? The real picture is still very unclear, but odds are good that if this thing balloons, it’s going to impact construction in a big way. Maybe not as big as the financial crisis of the mid to late 2000s, but contractors should be planning for some downtime.
Global Health Outbreaks in Perspective
The biggest fear for many with this novel coronavirus isn’t the viral illness itself, really. We fight off viral infections all the time and most of them don’t disrupt financial markets. The biggest thing, for now, anyway, is the fear factor. Yes, it does spread easily and rapidly. We know this. It also can cause severe respiratory symptoms in susceptible populations, which seem to be mature adults and people with weakened immune systems.
No, there is no treatment and no vaccine.
The larger problem, it seems, is the fear of the unknown. Some people will die, but people die of influenza every year, so death alone isn’t the main thing. Because it’s a novel virus that has only just mutated, we just don’t know a lot about it, and that’s terrifying in a country like the United States, where so many people live paycheck to paycheck and are often medically insecure.
What Does “Medically Insecure” Mean?
Simply put, America lacks public healthcare policies that embrace everyone. For the most part, this isn’t a problem for people who can readily afford to see their doctors and have easy access to insurance. However, for younger people who tend to lack affordable care options, those of us employed by or owning small businesses, and self-employed people with pre-existing health conditions, it can be very hard to secure health insurance that’s affordable. God knows there aren’t many doctors in this country that want to deal with patients that lack basic coverage (and who can blame them – they need to be paid, too).
Where this becomes a public health crisis is when those business owners, those kids who are working as laborers or just learning their trade, or the growing ranks of the self-employed in the “gig economy” start falling sick. These people may not be able to take off work or self-quarantine in order to avoid spreading disease further. Because COVID-19 symptoms can last up to six weeks, these patients risk crashing the economy by simply contracting a virus that may make them so weak they’re unable to work.
Having no sick leave means that these people will be tightening their belts for a while just to survive the infection. We all know that in a capitalist society, the less everyone spends, the worse it is for the whole system. If your framer has to cancel six jobs to recover from COVID-19, that’s tens of thousands of dollars that aren’t going to be spent on hiring additional help, buying tools, paying for gas, buying groceries, grabbing lunch and so on. But then we have to multiply that by the potentially millions of cases that are waiting to happen, even if we’re forgetting international companies like Amazon that are canceling pretty much everything so their people can remain on lock down.
Just that one framer and all the framers like him are going to have a huge impact on the economy, simply by staying home and tending their illness. As the retail sector starts to slow because the framers of the world aren’t shopping, real estate will follow, after all, people will be dipping into their savings accounts to ride this thing out. The timing could not be worse for this potential pandemic with the real estate sales season just about to start up. Who’s going to Open Houses when they fear they may contract an unpredictable illness that has no treatment?
This is why living in a medically insecure nation with an already overburdened health system is absolutely the most dangerous thing for your business right now.
This is why you need to be planning for the worse and hoping that all of this is one giant round of anxiety that turns out to be nothing.
Will COVID-19 Spark Recession?
It’s unclear right now what COVID-19 will do. We kind of need to wait for it to do it and then hopefully respond appropriately in the heat of the moment. But the recession that we’ve been just barely avoiding for a good year now is eyeballing all of this greedily. With Chinese production reduced dramatically and so many global trading partners depending on those goods, COVID-19 may be the last nail in the coffin that the China trade war started building.
However, there’s no hard and fast rule saying this is going to be the case. There’s not enough evidence on either side of the argument to be certain. The situation is cloaked in questions that no one can answer, which is, again, what makes the whole thing so terrifying. It’s also why we need to be looking more closely at our own public health policies to protect against future potential pandemics.
When those people who don’t have access to medical care start spreading COVID-19 like the common cold, it’s certain that all industries, including construction, will be affected. What that means for you is that now is the time to plan for the short term. Investing in marketing will give you an edge over all the competition that chooses to retreat in hopes of preserving cash, but there’s also something to be said for being tight-fisted if you’ve already got more work than you can do.
One thing is for certain: this thing is here and we’ve got to figure out how to deal with it while it’s happening. There’s no room for procrastination, you need to get your game plan on the table today. Know who will cover you should your regular crews get sick. Have your backups on speed dial. Plan for someone to take over should you fall ill. Take it day by day, but make sure each of those days has a contingency plan.
Have you felt any impact on your business yet? Are you anticipating any and if so, what are you doing to protect yourself?
By Kristi Waterworth
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