Programs like PPP are always going to give money to businesses or individuals that don’t need it. It’s just the nature of “crafty” writing in congressional bills. You’re going to help a lot of people but at the same time you have others taking advantage of the system.
Yeah, the PPP money is a tough one. It gave tons of businesses the help they needed to keep people on the payroll. The application process was simple to follow, easy to calculate the loan amounts, and generally had a pretty good system of checks and balances at the local bank to ensure you meet the criteria for the loan and loan forgiveness. With the unknown of the markets and the available work, it was a no brainer to apply for any money you qualify for. My office in particular had a ton of projects stop dead in their tracks. 6 months worth of revenue , poof, gone over the course of the first month.
In the construction industry, the biggest culprit is the ESSER funding and now the local jurisdictions getting AARPA? money. Those two programs will drive the price of construction to around 200% pre-covid cost per square foot prices. The issue is the money, but more importantly is the requirement to spend that money in a relative short period of time. Forcing the entire country to upgrade their mechanical system, interior finishes, windows, etc to get more air exchanges in the classrooms. While I get the overall idea, the mechanical suppliers and mechanical contractors can only do so much work and produce so many mechanical units. Pricing is skyrocketing at the moment, and it will keep going up until all the money is spent. Davis Bacon Wage Rates will become the norm, so basically every tradesman in the country is earning Union salaries and it will not go back. Good for them, but the days of a small office building costing a high 300/sf is gone and more likely 428/sf at a minimum.
