COVID-19 Has Potential to Slow U.S. Construction and Disrupt Building Materials Supply Chain

According to Richard Branch, chief economist at Dodge Data & Analytics, (DD&A) nearly 30% of products used in U.S. building construction are imports from China. This makes China the largest single supplier to the United States. While Canada and Mexico supply about 20% each. However, many of these countries, as well as suppliers in Japan, Korea, and Vietnam, which also export building products to the United States, hugely depend on China for raw materials. As the COVID-19 outbreak has taken the shape of a global crisis, material supply chain disruptions could also impact construction sites and development pipelines. This has led DD&A to speculate that they are currently expecting a modest decline in construction starts this year. Among many other headwinds that the U.S. economy is currently facing, the virus outbreak will likely lead to economic slowdown and push starts lower.