According to new data analysis from Levelset’s Construction Payment Index, the construction industry is starting to show signs of recovery from the impact of coronavirus. While some states are still seeing significant delays in construction projects and payments, as of May 2020 the payment health of the national industry is trending toward a full recovery to pre-pandemic levels.
What is the Construction Payment Index?
Since the coronavirus pandemic began, Levelset’s team of data analysts and engineers has been closely monitoring construction activity in states across the US. We have been compiling and analyzing data from a number of reliable sources to create a more complete picture of the pandemic’s impact on construction projects and payment trends both nationally and in each state.
Levelset’s Construction Payment Index is a measure that compares how construction payments are flowing through the industry, compared with pre-pandemic levels. An index of 100 is an indication of complete recovery – where payment flow in construction is equal to the 6-month average prior to March.
Of course, the construction industry struggled with slow payments well before the pandemic hit. While the 6-month period before the coronavirus impact is an imperfect baseline, it provides a benchmark from which progress can be measured.
The index is built on local, federal, and proprietary data that tracks:
- COVID-19 cases
- Payment disputes
- Construction starts
- Construction stoppages
Week of May 18, 2020: Construction Payments Hit 90% of Pre-Pandemic Levels
Since we started calculating the index on April 12, we’ve seen 5 consecutive weeks of improvement with the national index, increasing from 72% to 90%. This improvement is driven by declines in COVID-19 new cases, construction stoppages, payment disputes, and an increase in new construction starts.
This week, we published the results in the new Construction Payment Index. After four weeks of steady improvement, the national index reached 90% as of May 17, 2020.
We are updating the index with data on a weekly basis, and will continue to publish our findings as the situation evolves.
Most Impacted States
4 months after the first reported case in the US, several states are seeing a negative impact on construction projects and payments.
| State | Index Score |
|---|---|
| Massachusetts | 66% |
| Washington | 66% |
| Michigan | 68% |
| Colorado | 71% |
| New York | 73% |
| Missouri | 74% |
| Mississippi | 74% |
| Louisiana | 75% |
Least Impacted States
Even with social distancing and widespread stay-at-home orders, construction in some states has been almost entirely unaffected. For these states, the index shows similar levels of payment disputes, construction stoppages, and new projects when compared to the months leading up to the COVID-19 outbreak.
| State | Index Score |
|---|---|
| Alabama | 100% |
| Arizona | 100% |
| Arkansas | 100% |
| Indiana | 100% |
| Iowa | 100% |
| Kentucky | 100% |
| Minnesota | 100% |
| Nebraska | 100% |
| New Mexico | 100% |
| Oklahoma | 100% |
| Oregon | 100% |
| South Carolina | 100% |
| Utah | 100% |
States with biggest improvement
Pennsylviania experienced the greatest index gains in the week of May 18, climbing more than 23% to 91%. This was driven by reductions in construction stoppages and disputes, and an increase in new projects.
| State | Index Change |
|---|---|
| Pennsylvania | +23% |
| New Jersey | +19% |
| Minnesota | +14% |
| Kansas | +14% |
| Alabama | +14% |
States with biggest decline
Wisconsin saw its overall index drop by 4% to 77%. Payment disputes were the primary driver of these reductions.
| State | Index Change |
|---|---|
| Wisconsin | -4% |
| Colorado | -3% |
| North Dakota | -3% |
| Texas | -2% |
| Mississippi | 0% |
State Spotlight: Washington
This week, we wanted to check in on Washington State to see how their index has trended over the last several weeks. Washington had the first reported case COVID-19 on January 19th and had the earliest outbreak.
In the previous 5 weeks, Washington has seen its index improve from 30% to 60%.
Get in touch
Have a question, comment, or suggestion about the data?
Feel free to email our data team at datastory@levelset.com
Is your construction business struggling to get paid?
Call us at (866) 720-5436 or email us at sales@levelset.com
Do you need legal advice?
Post a question in our Payment Help Center to get an answer from our network of construction attorneys and payment experts.