The commercial construction market in Phoenix continued to boom during the first two months of 2020, with a whopping $1.86 billion worth of nonresidential buildings starting construction. According to research conducted by Dodge Data & Analytics. Statistics compiled by IHS Markit show that since 2011, construction spending in Arizona has been ahead of the rest of the United States, and Phoenix has had an even higher average than Arizona overall.
Effect of COVID-19
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Then came the pandemic. When Arizona Governor Doug Ducey imposed the March 31, 2020, stay-at-home order to slow the spread of COVID-19, the construction industry was classified as an essential business, and employees could continue working. Since so many construction projects were underway, stopping them would have significantly impacted the economy.
Despite being an essential business and better positioned to endure the pandemic than other industries, commercial construction is still affected by the economic slowdown and outlying issues of the virus. There may be a backlog of work in some cases, but many projects have been pushed back, and requests for proposals have lost pace.
Government Action Taken to Continue Growth
On March 27, 2020, a $2 trillion stimulus package bill called the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed to aid recovery of the U.S. economy during the coronavirus crisis. This lifeline helps construction firms survive by providing access to the capital necessary to maintain cash flow and pay workers. Experts have commented stating critical sectors, such as Defense, Energy, and Healthcare, need to invest heavily in upgrading and building new facilities to deal with and recover from the pandemic.
Projects Continue During Pandemic
Phoenix area commercial construction still moves forward safely and effectively despite the coronavirus. Downtown Phoenix business activity may have been altered or slowed, but the building is still in progress. There are 12 developments currently under construction, including hotels, residential high-rises, a biomedical research facility, and a mixed-use project. Construction firms have taken action to ensure the safety and health of their employees who are already accustomed to wearing protective equipment. New measures at job sites include increased hygiene and adhering to social distancing, including ceasing group gatherings for staff.Building Supplies Remain Available
Factory shutdowns in China during early 2020 that distressed other industries have not affected construction in the same way. The supply chain for construction companies seems to be working, with consistent prices and deliveries at near-normal levels. That being said, imported products can be more susceptible to delays, so contractors can be more resilient if they build their inventories, plan for longer lead times, or choose domestic suppliers. Areas of Opportunity for Commercial Construction in Phoenix The construction industry has been vital during the pandemic, from rapidly building hospitals to donating equipment. This is vital in order to progress forward after this pandemic. Stimulus Projects The stimulus bill sets aside large dollar amounts for commercial construction projects that will help revive the industry by stimulating new demand. These projects include: $100 billion in emergency grants to hospitals for new construction projects that will increase patient capacity. $150 million “to prevent, prepare for, and respond to coronavirus, domestically or internationally, including to modify or alter existing hospital, nursing home, and domiciliary facilities in State homes.” $156 million for “the study of, construction of, demolition of, renovation of, and acquisition of equipment for vaccine and infectious diseases research facilities.” $3.5 billion for Biomedical Advanced Research and Development Authority that “may be used for the construction or renovation of U.S.-based next-generation manufacturing facilities, other than facilities owned by the United States Government.”New Lease Projects
Due to the economic devastation of the pandemic, there will be businesses that never reopen. Commercial buildings will have vacancies, and owners will need to attract new businesses to occupy them. This provides the opportunity for commercial construction contractors to administer tenant improvements.
Revised Architectural Design Projects
The situation is still unfolding, but social distancing is currently a necessary action. It may prove only temporary, but knowledge about viruses and concerns about future pandemics is rousing fresh architectural design theories that will encourage people to spread out. Buildings and stadiums will need to be built or redesigned to create spaces that allow for both isolation and collaboration.Rely on Bespoke Builders in Phoenix
Phoenix’s welcoming attitude attracts people and businesses and has consistently been ranked as one of the fastest-growing economies in the United States. This thriving community is home to savvy entrepreneurs, a hot spot for small businesses, and a destination for large companies’ headquarters. This economy needs to be experienced, high-quality commercial construction contractors to ensure the infrastructure meets the needs of the business community.
Choosing the right general contractor is crucial for your project. Bespoke Builders wants to provide its individualized, superior service for projects in the Phoenix Metro area and throughout Arizona. Now, more than ever, it’s crucial to hire an experienced contractor who understands how to manage a project through to completion in the most cost-efficient way, without cutting any corners. We would love to discuss making your plans a reality. Call us at (602) 362-5900.