COVID-19 pandemic clouds construction picture

Around this time last year, the tugboat building industry in the United States showed signs of a rebound. They weren’t exactly the “good old days,” but after some lean years the industry appeared heading in the right direction.

- Casey Conley

Then, shortly after the new year, a once-in-a century pandemic brought economies around the world to a screeching halt. By mid-May, more than 95,000 Americans had died from COVID-19 and more than 36 million lost their jobs from the ensuing economic disruption.

Projections about the recovery yield wildly different timetables, ranging from six months to a year to five years or longer. But how soon the economy rebounds, both in the U.S. and in big industrial countries around the world, could determine how soon tugboat operators feel comfortable committing to major capital investments.

“My crystal ball is pretty murky right now,” said Mike Fitzpatrick, president of Robert Allan Ltd.

The company, based in Vancouver, British Columbia, had more than 20 tugboat design projects under development when the World Health Organization declared a pandemic in midMarch. Two months later, all but three projects were still proceeding. “This suggests to me that our owner and shipyard clients think, or at least are betting, that the market will recover sooner rather than later,” Fitzpatrick said.

Not surprisingly, new business for the firm slowed dramatically during March and April when the pandemic raged across Europe, North America and parts of Asia. “We typically sign six or seven new projects every month, whereas in the past six weeks we have only contracted one new project,” Fitzpatrick noted. “That said, we have seen new inquiries pick up in the past couple of weeks and I believe we will sign closer to a typical number of new projects in May.”