In construction, late payments are common, and it takes considerably longer for construction businesses to get paid. For construction businesses, the average daily sales outstanding (DSO)—the time it takes to collect on invoices—is 60 days. The general DSO average across various business sectors in the United States is 45 days.

Many construction companies operate on razor thin margins and most are definitely not strangers to cash flow issues. Compound those with a crisis and things can get rocky fast. However, dealing with financial hardships and challenging stretches in business life have given contractors and other construction business owners the skills and steadfastness to withstand difficult times.

It is no news that the global economy has been a bit shaky for years now, then the pandemic struck and everything went spiraling downward. Statistics show that unemployment was at 14.7% in April 2020, the highest rate in America since the Great Depression, and gross domestic product fell by 4.8%.

The construction industry opened the year 2020 cautious but optimistic about the future, and then  COVID-19 swept the nation and the rest of the world. The crisis has prompted governments to implement strict lockdown protocols to contain the spread of the novel coronavirus. Four months after the first recorded case in the country, several places are starting to relax these safety measures in order for the economy to move forward. At this moment, construction business owners need to think about a business reopening strategy and how they can adapt to a post-COVID-19 construction environment. 

At the start of 2020, the construction industry’s outlook had never been brighter. The early momentum of the United States economy boosted the confidence of construction industry leaders. According to the Associated Builders and Contractors’ Construction Confidence Index released mid-March, 72% of contractors expected to expand their staffing levels over the next six months, while more than 68% expected their sales levels to increase. Unfortunately, these expectations have largely plummeted because of the coronavirus outbreak.