The construction industry’s fears over the new development pipeline are being realized.
The total value of nonresidential construction starts in the Chicago area dropped to $269 million in April, a 58 percent year-over-year fall. Residential construction also fell 20 percent, to $419 million.
Those statistics, from research firm Dodge Data & Analytics and cited by Crain’s, illustrate how dramatic the impact of the coronavirus has been on the local economy.
“The April starts data is definitely sobering, but also very much expected,” Dodge’s chief economist Richard Branch said in a statement. “The near shuttering of the economy during April had a significant negative effect on the construction industry, leading to delays in both ongoing projects as well as those about to break ground.”
According to Crain’s, Dodge had already forecast a 10 percent decline in Chicago-area starts in 2020 from the year prior. And while Chicago, like many areas of the country, has just begun to reopen, it will likely take many months or years for the economy to recover.
Though Gov. J.B. Pritzker largely allowed construction to continue as an essential industry, developers and lenders are pressing pause on many projects as a result of the virus and the state of the economy.