As the country rolls into 2021 with a bit more hope than its citizens have felt since the pandemic began, COVID-19 is still taking an incredible toll on people, communities, and the economy. Two vaccinations are currently approved, and the first batches are being distributed, but it will take months — potentially well into the summer — before a majority of the U.S. population is vaccinated, which will have an impact on businesses.
Businesses that fall within the service sector are expected to continue taking hits through at least the first half of 2021. The construction industry is certainly one of those that is likely to struggle before seeing improvements. However, certain sectors will potentially fare better than others. Ohio construction insurance can help companies weather these challenging times.
Construction Outlook in 2021
Before the coronavirus’s relentless spread, the answer to the question “Is the construction industry growing?” would have been easy to answer. Yes, it was. Now, however, the pandemic makes it more difficult to provide such a concise response. Shutdowns, job losses, and health impacts have all contributed to a sharp decline in construction project starts.
The first half of the year does not look like there will be many improvements. Some factors may help stave off some of the losses, such as a $900 billion stimulus package passed that continues with the paycheck protection program and the economic injury disaster loan program. President Biden promises additional assistance as well. Heading into the second and third quarters, the construction industry could see the slow beginnings of improvements, though with differences across sectors.
Rising Residential Starts
After a year in which residential construction companies struggled, there is some hope for 2021. It is anticipated that the 2% losses will convert to 5% gains in residential starts. The single-family housing sector is likely to see a slightly higher rate of growth. This same sector actually grew by about 4% in 2020 due to low mortgage rates and a population shift from urban to rural areas. Consequently, multi-family housing starts have declined and won’t likely recover completely in 2021.
Mixed Trends in Commercial Starts
Commercial construction starts plummeted by 23% in 2020 and are only expected to see a 5% increase in 2021. The retail and hotel sectors have been the hardest hit. Both were already having trouble before the pandemic, but downward trends sharpened as the coronavirus spread. The hotel sector is not expected to see any sort of recovery over the next year, but the retail sector may see a slight improvement as more and more Americans are vaccinated and as shops and restaurants slowly begin to reopen.
Business Protections for 2021
This past year brought to the forefront some of the risks the construction industry faces. While the government has provided some help, the virus’s disruptions created just cause for taking protective measures. Obtaining Ohio construction insurance is imperative to safeguard your company during particularly challenging times.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877).