When activity resumes, the types of projects and scale of projects are also likely to change. Commercial and multi-family housing development is going to undergo serious reevaluation in light of the experiences of the current crisis. Lodging and other tourism and leisure development is likely to be even more heavily affected by long-term changes in demand and design needs. Government spending on infrastructure and its own facilities will most likely be artificially increased as a stimulus measure in the short- term. However, in the long-term, squeezed budgets and changes in usage patterns in big ticket items like airports and stadiums will ultimately put pressure on government sponsored construction. Ironically, the current crisis may actually spawn some construction activity as the initial shock wears off, particularly in areas of interior design and renovation. Adjustments to work and public spaces needed to increase social distancing for public health will eventually require more practical and permanent solutions than the makeshift efforts currently in place, such as tape on the floor, jury-rigged plastic shields and mannequins in empty seats. For some businesses, gaming in particular being one, with segments of manufacturing also, there is likely to be a surge in physical expansion to increase floor space to allow the same level of demand to be served or product to be produced under the new operating patterns as was previously done in tighter spaces. While such activities will help soften the blow, they will not fully compensate for changes in the demand for new development that are expected to occur due both to lack of demand and permanent changes in operating environments. Although tribal governments have the ability to more aggressively affect their own construction sectors through direct action, tribes will be unable to completely avoid the impacts of the economic downturn in the construction sector. Even if tribal construction businesses or tribal members with their own construction ventures derive the bulk of their demand from projects of their own tribe (most do not), their tribes may not be able to support the same level of activity as seen in recent years for some time. Nevertheless, the magnitude of the impact on tribal construction is likely to be less severe than for non-tribal construction businesses, even if the direction and patterns will be similar. Based upon the assumptions about the course of the pandemic described previously and our analysis of economic factors, prior business cycle patterns in periods of crisis, and the likely impacts of changes in operations and customer behavior, we forecast a decline in tribal construction revenue of 5.0 percent for 2020. For 2021, we forecast further decrease in tribal construction revenue of 4.2 percent from 2020 levels as the lagged effects continue to build, leaving the industry 9.0 percent below estimated 2019 levels. In 2022, limited recovery is forecast to begin, with revenue up 1.0 percent from 2021. This will still leave the sector 8.1 percent below its 2019 level. Full recovery is likely to take an additional two to four years beyond 2022. This information is presented in the graph on the following page.
∴ PROGNOSIS
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