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to further pullback in 2021 . Dodge expects the dollar value will drop 1 percent and the number of units started will decline 2 percent to 484,000 .
Institutional / Public . The growing budget deficits in local and state governments are expected to hold institutional construction , especially in education , to about 1 percent in 2021 . Public works construction starts will see little improvement as 2021 begins due to continued uncertainty surrounding additional federal aid for state and local areas . Additionally , the unfinished appropriations process for fiscal year 2021 , which began October 1 , raises doubt on the sector ’ s ability to post a strong gain in 2021 . Public works construction starts will be flat over the year .
The healthcare sector may fare better due to the need for more beds . But overall public works construction starts will be flat over the next year due to the fiscal uncertainty . Branch expects there will be a federal infrastructure construction package , but he said it will probably not be as big as it could be .
COVID‐19 ’ s Impact . Recent studies looked at the way contractors have changed the way they do business due to the COVID‐19 outbreak . About three quarters of both civil and commercial contractors report that they have changed work procedures to increase social distancing . However , allowing remote work options for office employees is more common among commercial ( 67 percent ) than civil ( 50 percent ) contractors .
While few contractors in general report that they have had to adjust employee salaries , furlough or lay off employees , there has been a greater need to do so among commercial contractors ( 20 percent ) than civil contractors ( 10 percent ).
Almost one quarter ( 23 percent ) of civil contractors have also adopted technology to support social distancing , far more than the commercial contractors , where only a nominal percentage ( 4 percent ) report making these kinds of investments . The civil contractors were also asked about the more long-term changes they expect to remain after the pandemic is over .
Three quarters ( 75 percent ) expect some of the changes they ’ ve implemented to be permanent , with a particular focus on their increased attention to cleanliness / sanitation ( 53 percent ), and adjusted safety and work procedures ( 42 percent ). Interestingly , 35 percent also report that they expect to encourage / allow remote working where possible , a much lower percentage than the 50 percent who are permitting it currently . This does suggest that a portion of the industry sees advantages to remote working , but that it is still not going to be a widely used practice after the crisis subsides .
Medium-Term Impacts as Recovery Begins . Associated General Contractors of America ( ACG ) Chief Economist Ken Simonson predicts “ sustained economic recovery , depending on a safe , effective vaccine that enough of the public actually takes ; a slower rebound than for other sectors as owners , investors / lenders , institutions and public agencies have lost revenue and face uncertainty about future demand ; less demand than pre-crisis for retail , offices , higher education , cultural facilities ; probably less demand for sports , entertainment , lodging and travel-related projects ; and less state and local building construction .”
Long-Run Construction Outlook ( Post-Pandemic ). AGC ’ s Simonson predicts “ slower population growth and slower demand growth for most construction ; a permanent shift from retail to e-commerce / distribution structures ; more specialized and online healthcare facilities ; fewer hospitals and nursing homes ; continuing demand for K-12 but much less for higher education construction ; and demand for restaurants should revive sooner than hotels and travel-related construction . It ’ s not clear if offices will decentralize or remain in less demand — and there ’ s no sign of change yet in urban / rural or state-to-state trends .”
The Global Outlook . According to ResarchAndMarketing . com ’ s report , “ Impact of COVID‐19 on the Global Construction Industry by Type ( Residential , Non-Residential , Heavy & Civil Engineering ) and Region-Forecast to 2021 ,” the global construction market size is expected to decline from $ 11,217.4 billion in 2019 to $ 10,566.8 billion in 2020 . However , the industry will show signs of recovery in 2021 and reach a market size of $ 11,496.7 billion .