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Dear Fellow Industry Professionals,
As we have all become too accustomed to hearing lately, it continues to be very hard to predict where our state and national economy is heading and what impacts our industry’s companies, workers and customers will face in the next few weeks, coming months and years down the road. At NCBPA, we continue to support our member companies with industry news, online events and best practices that are helping their companies and workers understand these challenging times and take action where they can.
Today, we’re providing the first article in a five-part series this week detailing how our industry as a whole, member companies, member professionals and related industries that we work with are dealing with the present and thinking about the future. It’s our hope that this information improves understanding and provides a few small actionable steps that can help during these uncertain times.
The information we’re providing covers residential and commercial construction, new and existing buildings, workforce development opportunities, federal policy action and much more. NCBPA commits to continuing to help our industry understand the pandemic’s impacts on our industry and welcomes your feedback to help us provide the right messaging and information.
From what we can tell, the industry impact we’ve felt in North Carolina is far less severe than other states. But yes, without a doubt we are witnessing difficult circumstances with layoffs, furloughs and some companies struggling to stay in business. We hope that reading these articles helps improve your understanding of your own business’ needs and opportunities, and those of your peers.
As always, we welcome your feedback, guest articles and webinar presentations to help inform and inspire during these challenging times.
NCBPA and I personally are committed to supporting every company and individual that we can.
Take care and stay safe,
D. Ryan Miller
Founder & CEO, NCBPA
Provided below is a summary of feedback that NCBPA has received from member companies about how the pandemic is impacting their businesses, workers, customers and suppliers:
There’s no doubt that the building performance industry has taken a major hit during the pandemic. Despite being declared essential services, few firms working in the construction-related fields in North Carolina have maintained pre-COVID-19 operations and most are fighting hard to keep projects going while staying safe in this “new normal”.
Based on conversations with our member companies and industry reports from across the various sectors they work in, here are top-level findings that describe how our industry is doing right now:
- New commercial and residential construction continues to be strong with little slow down, for now.
- Existing commercial building services have slowed, but the majority of companies are finding ways to safely work on service and renovation projects.
- Residential energy efficiency and home performance services that require workers to enter occupied single and multifamily homes have come to a crashing halt, in the majority of cases.
- Industry companies are furloughing workers, laying off workers and taking advantage of federal, state and local programs to stay solvent and continue working with tight controls and safety measures in place.
- Where possible, firms are adapting to work-from-home practices and using virtual and remote technologies to perform internal operations but also to assess homes and buildings, as well as to hold client and vendor meetings.
- Student summer internships have been mostly paused or canceled, creating challenges for students with established travel and housing plans as well as those needing internship credits to graduate and join the workforce.
- Energy efficiency and utility programs that involve entering homes and buildings are mostly paused due to liability, health and safety concerns.
- Building and energy code requirements have not changed, though flexible provisions that limit individual contact are in place at the state and many local levels.
- The majority of manufacturing firms we heard from paused operations in late March and early April and temporarily furloughed workers, but have since brought them back and are running at normal capacity with proper safety measures in place.
- Special allowances between industry oversight boards and certification organizations have been implemented to help contractors, code officials, builders and many others continue working (example: code officials being allowed to accept energy code compliance reports from home energy raters).
Business owners report investing their time early on in the pandemic to save money and lower costs by refinancing debt through state and federal programs as well as through private and community banks with access to record low interest rates. Some businesses have used the downturn to write off assets, donate inventory and materials to help those in need, and obtain new insurance policies based on forecasts for lower work volume and payroll budgets in the coming months.
Over the past few weeks, NCBPA member companies have shared their stories with us via email and phone to help their peers understand the differing circumstances, identify trends in similar sectors and learn best practices for getting by. The majority of the feedback we received came from contractors working in existing homes, as this sector has been hit the hardest and is seeking help. Members working in commercial construction and residential new construction report far less impacts now, but have expressed concerns for the coming months. These concerns and other feedback on what the future may hold are highlighted in Part 4 below.
Member companies report mixed sentiments and experiences based on their primary sector:
- Hiring has generally been slowed and paused in some cases.
- Workloads have mostly slowed as conditions have become more difficult, though work has not halted in most sectors.
- Residential services firms working in existing homes have been hit the hardest. Two examples include:
- One company requested their key metrics be shared, which reflect:
- March 2020 Sales are down 72% over 2019.
- April 2020 Sales are down 84% over 2019.
- Inspections for March are down 80%.
- No work being performed in April, putting us down 100%.
- As of March 27th, we laid off all our full-time employees, 8 in total.
- A similar firm in a different region of North Carolina laid off 14 full-time employees in late March and is closed until at least the end of April. Even though the company is allowed to work (as a construction service), customers backed out of jobs to avoid interacting with workers in their homes.
- One company requested their key metrics be shared, which reflect:
- These examples illustrate the worst scenarios we heard, which varies greatly with similar firms working in the residential new construction industry, which has faced little slowdown. One owner/operator of a new home services company that works with builders and HVAC contractors in unoccupied homes during construction has experienced significant increases to profitability and volume in March and April. Another firm working only in new homes with 13 employees has not laid anyone off and does not intend to.
- Several small to mid-sized manufacturing firms shut down for two weeks in early April to pause and plan, and then came back in mid-April with either half-time or full-time workers. One firm owner reported: “We had zero impact in March, then did a two-week shutdown in early April and helped our staff to file for unemployment. We then came back at 100% in the third week of April. The reason we did that is twofold – we saw a slowdown from clients in the April/May timeframe and also respected the state shutdown, though it did not affect us directly in manufacturing.”
- Companies that ship home and building components or module units have had a unique challenge in accessing project sites located in areas that may be closed or restricted. Large construction projects across the country have shutdown, leaving North Carolina firms with overstocked inventory and slowed production lines, in some cases. Individuals ordering modular homes have canceled or indefinitely delayed orders amid worries about markets getting worse and in some cases an inability to ship to places that are unable to accept deliveries.
- Several of the largest companies in our membership working in public buildings, institutions and corporate campuses have faced different types of challenges but are finding ways to keep work going at a slower pace. Some NCBPA members are forced to follow cost reduction and safety guidelines from their U.S. or international headquarters that are slowing down their work or stopping it altogether, though with common protections and measures currently un use, this work could continue (and does with other smaller firms).
- Residential builders and HVAC contractors report remaining busy and only needing to adjust to social distancing and other new workplace norms.
- Some members reported early on that a full shut-down of construction services is likely best in the long-run but the decision to keep construction as an essential service was far out of their hands at the state and federal levels.
- Early in the pandemic, some companies were interested in special exemptions to code requirements or program regulations that would allow them to perform some services remotely or using modeled vs. actual data (for modeling or testing homes or buildings for efficiency). However, when it became clear that the long-term impact of “opting out” of these requirements may show that those requirements aren’t actually needed, the feelings changed.
Workers are facing a variety of employment challenges, though those challenges vary greatly depending on what sector they work or have been working in:
- Workers at companies that primarily serve existing homes are the most frequent to be laid off, terminated or furloughed.
- Workers across multiple sectors have accepted short furloughs, applied for unemployment, and then been hired back at part or full-time hours.
- Workers in some sectors including manufacturing and commercial energy services have had to accept less hours (both salary and part-time positions) to remain employed and keep insurance and benefits, in many cases.
- Some workers voluntarily left their positions in mid-March due to concerns over their health and that of their families, bringing some projects and services underway or scheduled to an immediate halt. Co-workers that remained picked up those workloads in many cases, as opposed to new employees being hired.
- Some business owners report coming to mutual and intentional termination agreements with workers to protect their health and to take advantage of unemployment programs. Some business owners report employees accepting unpaid time away when a spouse or partner is able to cover their needed income for a temporary period.
Companies report a variety of innovative means to adapting to new work conditions:
- Office and field-based teams are facing stresses of having to quickly adapt to remote and virtual work environments in areas where in-person meetings are routine. Firms that already had more flexible and remote work opportunities report far less difficulty in adapting to this new norm.
- Blower door and duct blaster testing presented challenges for some firms early on over concerns of the testing services spreading airborne virus particles. When used properly and in the right conditions, such as properly pressurizing homes or buildings with no other individuals inside, these services have continued.
- Some energy audits and performance inspections have been able to proceed using remote technologies with on-site personnel interacting with service providers over services including Zoom, GoToMeeting, Facebook, Google and others.
- Companies that are already in the building automation sector report increased interest from clients due to remote building controls and energy management capabilities.
Companies report a variety of services and work conditions that haven’t been as easy to adapt to social distancing and remote work environments. Two residential services include:
- Inspections for indoor air quality are oftentimes for clients that are already immune compromised, putting them and the worker in an unfavorable situation. In most of these cases, companies have had to stop these types of services entirely.
- Low income weatherization services have slowed or stopped entirely due to concerns over entering occupied homes. In many cases, these homes are small single family or multifamily spaces with multiple residents inside. These factors make social distancing near impossible. Business owners report additional concerns regarding a lack of resources for these low income families to follow to ensure their own health and safety, creating additional risk of spreading the virus with workers that would be entering the home.
Many business owners acted early to participate in available state, federal and private financing and paycheck protection programs, with mixed results:
- “We applied for PPP funds but have not received anything to date. These funds would keep our workers employed longer in a longer downturn, but it is not clear if it would be enough to keep them employed if housing starts take a long time to come back.”
- “Because of our PPP loan we are able to be at full staff for the next six weeks. After that, we don´t know.”
- “We’ve managed our company in a financially conservative way with backup funding to help us through unforeseen circumstances, so we will be able to draw on that to keep our people going. We have not laid anyone off as a result.”
While not the primary focus of our surveying and reporting, support organizations that work with small, mid and large-sized building performance firms, such as nonprofits, financial or marketing services firms, and associations like NCBPA, are also impacted by the pandemic:
- The majority of these firms that are not in homes and buildings daily have adapted quickly and easily to working from home.
- Organizations that lobby are excluded from the CARES Act and programs like the PPP. As a lobbying organization, NCBPA and several of our allies are in a challenging position of needing to advocate and lobby more for support for our industry, while having less access to traditional funding channels from members and support organizations that are holding on such funding for the time being.
- USGBC announced several weeks ago that all of their in-person events in 2020 were canceled.
- The traditionally in-person Triangle High Performance Home Tour was transitioned to a virtual event that was held this past weekend and will also be held next weekend.
- Industry conferences have been canceled, moved online or rescheduled for the fall to accommodate travel restrictions. NCBPA’s August 24 – 26, 2020 Conference in Raleigh is at the moment still scheduled, but several other industry conferences including the State Energy Conference have been rescheduled to take place just two weeks after it. NCBPA and other conference organizers are increasingly concerned about the build-up of many industry conferences overlapping in target attendees, target exhibitors and sponsors, and target topics that may diminish the value of all conferences, if held individually. NCBPA’s conference with PHCC was already planned to be a partner conference with ten organizations participating.
Many NCBPA member companies have acted out of good faith and necessity to form creative solutions and messaging for how they are handling the pandemic. Provided below are just a few examples from NCBPA members representing commercial, residential, manufacturing and product supply sectors.
- Product supplier CaraGreen provides education on how this “new normal” will impact design and material selection decisions in homes going forward. Click here for the article.
- Commercial HVAC and energy services firm Brady balances sharing information on its adjusted business practices with continued growth and hiring. Click here to view 20 jobs currently available with Brady.
- Residential new construction energy services firm Performance Point recognizes workers for making the effort to continue servicing their customers across the Southeast. Click here for the article.
- Product manufacturer MaxLife Industries adapted its existing building enclosure products to design factory-built shelter modules that can be deployed to needing areas quickly. Click here for the article.
- Marc Tannenbaum of Contractor Nation led a free webinar for residential contractors on how to stay “above the line” with business finances during good and bad times. Click here for a free video recording.