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On October 8, 2020, Hank Harris, the director of Ward and Smith Business Consulting and a senior chairman at FMI Corporation, delivered the keynote address at Ward and Smith's 2020 Virtual Construction Conference.
Harris, an industry veteran with over 30 years of experience in construction consulting, addressed the current economic state of the construction industry, forecasted the economic scenarios that construction companies might face over the next year or two, and offered advice on how companies can respond to the changing economic realities.
The Current Economic Outlook
With respect to the current state of the construction industry in 2020 and the COVID-19 pandemic's impact, Harris notes that the pandemic has induced a recession that is likely to wipe out economic gains made by construction companies in 2018 and 2019 and to stagnate short-term economic growth. Thus, most companies should expect growth for 2020 to be flat. At the moment, most companies Harris works with have healthy balance sheets as a result of several strong years and do not have large concerns about the near term because of strong backlogs. Harris warns, however, that the construction industry will be impacted by the pandemic, even if those impacts aren't felt right away. Therefore, it is a good idea for companies to start thinking beyond the short term.