A CONSOLIDATED VOICE: AEM TO SHED LIGHT ON COVID 19’S IMPACT ON CONSTRUCTION, UTILITY INDUSTRIES

May 26, 2020
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It’s hard to believe that CONEXPO-CON/AGG was two months ago. With more than 130,000 registered attendees and 2,000 exhibitors at North America’s largest construction trade show, the exhibit floor in Las Vegas was jam-packed, spirits were high, and buying was in full-force.

So much planning goes into CONEXPO-CON/AGG. Every three years, the event brings buyers and sellers from across the United States and around the world together to see the latest equipment and the newest technology, learn the most updated best practices, and network with old friends while making new ones.

Now, looking back, we couldn’t have imagined what was waiting for us upon our return home.

No one knew then just how much life would change. In the weeks and months since CONEXPO-CON/AGG was held, we’ve all had to adjust to life at a socially acceptable distance and learn how to work and do business from home – all while keeping ourselves, our families, and our businesses safe.

The first several weeks following CONEXPO-CON/AGG were spent by many scrambling to comply with new guidelines and mandates associated with the ongoing COVID-19 pandemic. Things changed rapidly. Business leaders made quick decisions, carefully balancing employee safety and bottom lines.

Industry associations began to check in on their membership, while trade publications solicited feedback from their readership. They sought to learn how businesses were managing and surviving the pandemic. Surveys eventually began to circulate, asking questions like:

  • What is happening to your workforce, to your supply chain, to your backlog?
  • How are you sanitizing your environment, distancing your employees, and complying with guidelines and regulations?
  • Have you applied (or will you apply) for federal aid?
  • What is your economic outlook, and what has happened to your budget?

The surveys reflect the dawning awareness that has surfaced over the past months: The COVID-19 pandemic may not be over as quickly as we had hoped. More importantly, most – if not all – businesses will be affected to some degree.

For more information and resources on COVID-19, visit the COVID-19 section on the AEM website

WORKING TOGETHER

Building on our relationship with industry associations and partner publications through CONEXPO-CON/AGG, AEM is in a position to be the consolidated voice of the customer. We’re working with many associations and publications to pull together industry-wide information and help companies make more informed decisions. AEM is planning to take the role of data aggregator and provide matrix analysis of all the surveys already completed, as well as adding additional common questions across all channels.

Our objective is to look at data already collected from our industry partners and see if any patterns arise. We’ll then compare how the responses change as surveys are sent out on a regular basis. Ultimately, what we’re looking for is the voice of the customer. We want to know if it’s louder (or different) by demographics, and we want to determine the speed of industry recovery.

Equipment end-users will undoubtedly find ways to adapt to this new way of doing business and find work if theirs was lost during the pandemic. Helping our membership understand new challenges – and where end users are going to invest in order to stay competitive – is an important piece in making this “new normal” seem, well, normal.

CONSTRUCTION INDUSTRY AT A GLANCE

The construction industry was in a good place for a long time. The economy was strong, businesses were busy, there were more jobs than there were qualified people available to work them.

Heading into CONEXPO-CON/AGG 2020, the unemployment rate stood at 3.6% and the gross domestic product (GDP) was increasing 2.1% quarter over quarter, up to over $21 billion. No one could have predicted a worldwide pandemic. But here we are. Just a few months have passed, and we now find ourselves navigating an economic downturn, laying off and furloughing workers, and manipulating budgets to keep our doors open.

While most of us have had to learn how to work from home, the construction industry has not stopped. Projects from foundation excavation to commercial high rises (from the ground up) have persisted through the pandemic.

“Infrastructure was – and always will be – essential to our economy and to our society,” said AEM Director of Construction Sara Feuling. “In fact, many transportation projects have taken advantage of the pandemic and the reduced traffic on the roads – increasing scope of work, extending lane closure hours, and reducing road restrictions. “

As soon as things return to “normal,” people aren’t going to wait to hit the road. Even with new health and safety guidelines and regulations in place, projects are moving along quicker than ever to ensure we’re ready.

The private sector and business developments have taken a bigger hit than transportation. However, as people are spending their days at home, “weekend warriors” are taking on more and more home projects, increasing the demand for materials and driving up retail prices, which has – at least somewhat – made up for the downturn in privately funded developments.

UTILITY INDUSTRY AT A GLANCE

There are quite a few takeaways from COVID-19’s impact on the utility industry. For starters, it’s probably more important – perhaps more than ever before – for a utility to make sure it keeps the lights on and keeps us all connected. With everyone working from home, keeping our devices powered and internet uninterrupted has never been as crucial.

You’d naturally think that with more lights on at home, maybe your television on in the background, or your Alexa device streaming some tunes, power utilities would be pulling in more billable kilowatt-hours. This may be the case directly from our neighborhoods, but consider all of the other power consumers that are shut down – restaurants, shopping centers, and probably the most notable one this time of year, sports stadiums. Recent reports indicate load in the U.S. was down around 6%, when compared to that of the previous four years.

“Think about the toilet paper shortages many of us have experienced. It’s not that people are using more bath tissue, it’s just that they are using it in different places,” said AEM Senior Director of Utility John Somers. “The majority, if not all, of our usage is now at home instead of at the office, gym, or a restaurant. We’re not using more, or producing less, it’s just that it’s being consumed differently. It’s all about load balancing. Now image that for a power utility. Not only are they dedicating additional resources to make sure different areas are adequately powered, but overall consumption is less, leading to less income.”

In order to offset this reduction in revenue, utilities have undoubtedly cut funds to routine maintenance, such as vegetation management around power lines, and grid modernization initiatives. Some have also had to shift resources to repairs caused by homeowners, who now have a lot of extra time at home, and decided to put in a new fence, but have not followed safe digging best practices. Now is not the time to hold back on infrastructure investment. We also need to make sure we're following safety measures and best practices, maybe now more than ever, to mitigate disruptions.

LOOKING TO THE FUTURE

Think back a couple of months. The initial realization that all of our work trips would be canceled was – at least at first – a relief. The first video conference, Zoom meeting or Skype chat seemed pretty awkward. It was easy to appreciate our short morning “commutes” from one room in hour house to another, along with the earlier starts to afternoon happy hours with no concerns about driving home.

The acknowledgement that we all have lives out of work has also been greatly appreciated. CEOs encourage team members to help their children with homework, to let the dog outside when it barks, and to wear a hat if an opportunity to take a shower was missed earlier in the day.

Our industries are strong – in both mind and spirit. We’ve been able to keep going and figure things out because quitting isn’t an option. And it’s because of that strength – and how it shines through in everything we do – that we’ll get through this crisis. Giving up is not an option. Things have to keep happening. Our hope through this survey work is that we can show you, even though things aren’t going to be the same, we're going to make it. Like we always do.

How fast that will happen, nobody knows, but we are hopeful that our consolidated look across the construction and utility industries may provide some insights. Several themes have emerged from the surveys mentioned above – leadership, communication, and that people matter. But there’s still more to uncover, learn and eventually apply to our industries.  

As the leaders of AEM, we are asking you to help us ask our partners the proper questions that will help uncover the right information. This is your chance to anonymously ask questions of your customers that you may not have had the opportunity to do previously. Do you have a question for our partners to ask in future surveys? Have some other information you'd like to share about the COVID-19 pandemic and how it’s impacted your customers in the construction and utility industries? Reach out to me at [email protected].

Until we meet again in person, stay safe and remember your work is appreciated, it's essential, and it remains the building block for our nation’s future.

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