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November 2020

The Impact of Covid-19 on the Construction Industry in Sparsely Populated States

Sparsely populated states such as Wyoming and the Dakotas, and their construction industries, have felt COVID’s impact differently from much of the nation. Like most states, Wyoming and the Dakotas deemed construction an essential industry at the outset of the pandemic. Unlike many other states, Wyoming and the Dakotas did implement similar restrictions with respect to other businesses, government offices, or courts as other states. Given the lack of densely populated areas, these states did not see the rising number of COVID cases during the early months of the pandemic, and construction projects, including government projects, residential projects, and commercial projects continued.

However, recently, the construction industries in these states have begun to feel real impact from COVID-19. Each of these states relies heavily on the oil and gas industries for their state economies. While the oil industry was seeing declines over the past years, the pandemic essentially stopped the production of oil and gas in these states. On August 5, 2020, the last operating oil well in Wyoming ceased production and, for the second time since 1884, there are no operating oil wells. Construction has also slowed dramatically. Combined with bills not being paid and construction projects stopping, restrictions are now being put in place. Restrictions on restaurants, government offices are closed to the public, and courthouses in Wyoming and the Dakotas have vacated all jury trials through at least January 2021.

Essentially, these states, which avoided the initial impact of the pandemic, are now feeling it. Like in other states, our role has changed from preparing for trial and trying cases to advising business owners on how to continue their businesses during the coming months. Advising contractors and subcontractors regarding their rights under the various lien statutes is becoming more important. Cases, which were to be tried in November and December, are now moved to arbitration.

COVID-19 and its impact are now a reality in these states which tried to retain a sense of normalcy during 2020. Moreover, the impact of 2020 on the construction industry in these areas will continue to be felt over the next several years.