Construction considered ‘essential’ in many US regions

20 March 2020

Construction in the US amid coronavirus precautions continues for now in most places and could indefinitely, if industry officials can persuade government to include various aspects of the industry among other “essential” business.

Trade associations, such as the Associated General Contractors of America (AGC), the Association for Equipment Manufacturers (AEM), Associated Equipment Distributors (AED) and Equipment Dealers Association (EDA) are all advocating for various facets of construction to be exempt from existing and potential public health policies that would require work stoppages resulting in economic hardship for workers as well as numerous other negative consequences to the general economy. 

On 18 March, AGC joined a host of other business groups in calling on Congress to enact a number of tax-related measures to safeguard companies, regardless of size, during the COVID-19 outbreak. This includes policies such as immediately providing accessible, unsecured credit to businesses, suspending the filing of business returns and the payment of all business taxes, and amending the Tax Code to, among other items, restore the ability of businesses to carryback any net operating losses against previous year tax payments.

A statement from the AGC said it believes these measures will help to minimise the number of businesses closed and workers unemployed during this time and ensure that all businesses have the resources necessary to ride out the pandemic.

For their part, the Association of Equipment Manufacturers (AEM), Associated Equipment Distributors (AED), and the Equipment Dealers Association (EDA) urged governors to designate equipment manufacturers, suppliers, and dealers, and service technicians as “essential” to the economic continuity of the states as they continue to respond to the COVID-19 pandemic.

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“As our nation confronts the unprecedented challenges caused by the COVID-19 pandemic, we call on the nation’s governors to recognise the essential role that equipment manufacturers, suppliers, distributors, and service technicians play in feeding our people, connecting our nation, and powering our homes and hospitals,” said Dennis Slater, president of AEM. “As our nation’s governors take steps to protect Americans from the spread of COVID-19, AEM and our industry partners urge them to consider the essential role that our industry plays to the health and economic well-being of communities across the country.” 

According to a report from The Real Deal, New York Gov. Andrew Cuomo has announced all nonessential businesses (those that rely on in-office personnel) must have no more than 25 percent of their employees working outside their homes, implying the exclusion of construction. Industry still seeks a formal characterisation as “essential,” alongside healthcare providers and grocery stores.

In San Francisco, which issued a shelter-in-place order on 16 March, housing construction was included among its essential businesses. Construction also continued in Las Vegas following an order by the Nevada governor for nonessential businesses to close for 30 days.

Work continues is Los Angeles as well, according to a report from The Real Deal. “Everything so far looks good,” said Los Angeles and Santa Monica, California property developer Neil Shekhter, whose construction and property management companies include NMS Properties.

Noting that his number one priority is to make sure workers are safe, Shekter added that permits for his projects are at the mercy of local governments keeping the lights on in their building departments.

“Our projects are still in operation,” Gust Soteropulos, senior vice president of the Southern California region for contracting firm Webcor was quoted. He added that while “the situation is fluid” and they’re “making revisions as new developments take place,” there are no plans currently to shut down roughly 800,000 square feet of construction projects in L.A. County.

Boston became the first major American city to halt all construction projects on 16 March, a move that sparked calls from City Council members for New York to do the same, according to reports.

Carlo Scissura, president of the New York Building Congress, was quoted that some services “have to keep going,” pointing to infrastructure maintenance and the construction of affordable housing.

Asked about liability issues, Soteropulos of Webcor in Los Angeles was quoted, “The safety of our teams is always of the utmost importance and we are continuously monitoring the situation and adjusting as required.”

Brian P. McGuire, president & CEO of AED said, “We are in a unique situation, but our nation has faced many challenges before and it’s imperative that our nation’s governors balance health and safety with economic consequences. Companies that supply the equipment and perform the needed service and maintenance on the machinery are essential to ensure vital infrastructure projects are able to continue uninterrupted.”

“In order for crops to be planted, harvested and brought to market our members and their employees are critical. No crops means no food, no meats, no fruits, no vegetables…nothing to eat. Machinery needs to be maintained, repaired and key parts must be on hand and accessible,” said Kim Rominger, president & CEO of EDA.  “As such, it is imperative that we emphasise the fact that our dealers and their employees are essential businesses and workers.”

In letters to all 50 governors, AEM, AED and EDA affirmed their commitment to the health and safety of the country, as well as the need to safeguard the nation’s equipment production, distribution, and maintenance capability, stating:

“As our nation continues to confront the ongoing and evolving challenges caused by the COVID-19 pandemic, we urge you to consider the essential role that equipment manufacturers, suppliers, distributors, and service technicians play in guaranteeing a steady supply of U.S.-produced food, fiber, feed, and fuel, maintaining our nation’s roads and bridges and other important infrastructure assets, and keeping the nation’s energy infrastructure secure and resilient.

”At a time when farmers are preparing for a new planting season, contractors are looking to build and maintain critical infrastructure assets, and utilities are working to keep homes and hospitals powered, we have an obligation to ensure that they have access to the equipment and parts, as well as the repair and maintenance services, they need to perform these functions.”


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