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ABC

Construction Input Prices Up 3% in March, 24% Year Over Year

by Shield Wall Media Staff April 13, 2022

Construction input prices rose 2.9% in March, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices expanded 2.8% for the month.

Construction input prices are up 24.4% from a year ago and 39.1% from February 2020, the month before the COVID-19 pandemic began to affect the economy, while nonresidential construction input prices are 25.0% and 39.2% higher, respectively. Natural gas prices are up more than 200% since the start of the pandemic, while crude petroleum prices are up more than 100% over that span.

“Consumers are right to complain about inflation, which has been north of 8% during the past year,” said ABC Chief Economist Anirban Basu. “But America’s contractors have experienced materials price inflation nearly three times that during the same period. For now, there are few signs of relief. Many prices rose on a monthly basis in March, reflecting ongoing upward price momentum, including iron and steel (1.4%), key roofing materials (1.6%) and nonferrous wire and cable (4.4%).

“For contractors, this is not where the inflation narrative ends,” said Basu. “Despite recent growth in the nation’s labor force participation rate, contractors continue to contend with shortages of skilled construction workers. Supply chain setbacks related to the spread of another omicron variant along with the Russia-Ukraine war will also affect equipment availability. The latest ABC Construction Confidence Index survey indicates that approximately 3 in 4 contractors have suffered an interruption in delivering construction services in recent months. These challenges will persist.

“There is one more significant consideration for contractors,” said Basu. “With inflation running hot, the Federal Reserve will have to work even harder to slow the economy to trim price pressures and expectations. Recession risks are accordingly rising, and while that is unlikely to affect the level of contractor activity in the near term, that could eventually set the stage for a period when demand for construction services declines.”

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Construction Backlog Up, Contractor Confidence Down in March

by Shield Wall Media Staff April 12, 2022

WASHINGTON, April 12—Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 8.3 months in March, according to an ABC member survey conducted Mar. 22 to April 5. The reading is up 0.5 months from March 2021.

View ABC’s Construction Backlog Indicator and Construction Confidence Index tables for March 2022.

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels declined in March. All three indices remain above the threshold of 50, however, indicating expectations of growth over the next six months.

“Demand for construction services remains strong despite sky-high materials prices, skills shortages and elevated bids,” said ABC Chief Economist Anirban Basu. “ABC contractors indicate that demand will remain strong, with 65% of contractors expecting sales to grow over the next six months. Backlog increased in March, indicating that bidding opportunities remain plentiful. The recent rise in interest rates could induce certain project owners to move forward with construction work to access affordable investment capital while it remains available. It is also conceivable that at some point private demand for construction services will decline as the cost of capital rises.

“If the story ended with demand, it would be as gratifying as a fairy tale ending with happiness across the kingdom,” said Basu. “Alas, one must address the issue of supply. More than three-quarters of contractors indicate that they had recently suffered some setback in delivering construction services.

“Among the primary factors are a lack of sufficiently skilled workers as well as materials and equipment shortages. These dynamics will continue to increase the cost of construction delivery during months to come. The Russia-Ukraine war has exacerbated inflationary pressures and will likely result in more aggressive monetary tightening by the Federal Reserve. For now, the average contractor expects to be able to pass along a significant fraction of the cost increases to project owners. It remains to be seen whether that will persist as interest rates rise.”

ABC, AFSP Announce Partnership to Address Suicide Prevention

by Shield Wall Media Staff April 10, 2022

Associated Builders and Contractors and the American Foundation for Suicide Prevention have announced a collaborative partnership to address mental health and suicide prevention throughout the U.S. construction industry.

The goals of the partnership are to improve the mental health of construction workers through effective suicide prevention education, intervention and postvention strategies; to encourage, equip and empower mental health champions in the workforce; and to introduce collaboration between ABC and AFSP chapters nationwide.

“Safety includes total human health—emotional, social, mental, intellectual, ﬁnancial, occupational and spiritual wellness—and we must continue to raise the bar for safety for the construction workforce of more than 7.5 million,” said Greg Sizemore, ABC vice president of health, safety, environment and workforce development. “Our people are our greatest asset, and this partnership will take our total human health and safety practices to the next level. Going forward, this is the greatest opportunity to leverage and advance world-class safety for our people, both physically and mentally.”

“Studies show that 1 in 5 Americans will experience a mental health condition this year, and 50% will experience one in their lifetime. This has an impact on workplaces, too, and that is why a partnership with ABC is so important,” said Bob Gebbia, CEO of AFSP. “We commend ABC leadership for the commitment they are giving to the construction workforce and are pleased to help support their efforts with educational programs.”

Specifically, the partnership between ABC and AFSP will:

• Develop and disseminate education resources on mental health and suicide prevention in workplaces and leverage opportunities to engage workers.

• Support suicide prevention and postvention education in the construction workplace at all levels of the organizations’ chapters and members.

• Participate in key events where worker safety and health, as well as safety and health practitioners’ and other professionals’ development are addressed.

• Promote and facilitate the transfer of relevant mental health and suicide prevention and postvention research and findings to practitioners and to the construction workforce.

• Share opportunities with ABC and AFSP chapters on supportive programs and events.

Nonresidential Construction Adds 11,300 Jobs in March

by Shield Wall Media Staff April 10, 2022

The construction industry added 19,000 jobs on net in March, according to an Associated Builders and Contractors analysis of data released by the U.S. Bureau of Labor Statistics. After 23 months of recovery, construction employment has at last exceeded pre-pandemic levels. On a year-over-year basis, industry employment has expanded by 220,000 jobs, an increase of 3.0%.

Nonresidential construction employment expanded by 11,300 positions on net, with all three subsectors generating growth. Heavy and civil engineering added 5,000 net new jobs. Nonresidential specialty trade contractors added 3,700 positions. Nonresidential building added 2,600 jobs.

The construction unemployment rate fell to 6.0% in March. Unemployment across all industries declined from 3.8% in February to 3.6% last month.

“Contractors continue to signal that they are searching far and wide for additional workers,” said ABC Chief Economist Anirban Basu. “With more workers reentering the labor market, job openings continue to translate into employment growth. Given elevated backlog and the expectation that demand for services will remain high, according to ABC’s Construction Backlog Indicator, construction employment is poised to grow further this year.

“Interestingly, the unemployment rate for construction workers is well above the economywide rate,” said Basu. “This is at odds with the notion of a severe worker shortage facing construction. The issue relates to skill sets. While many refer to the current circumstances as a labor or worker shortage, it is perhaps more properly characterized as a skills shortage.

“With infrastructure spending set to rise and construction workers retiring at a rapid rate, skills shortages are likely to worsen going forward,” said Basu. “That translates into rapid wage growth. Given high and rising materials prices, project owners will continue to see elevated bids for construction service delivery, although how this will affect project postponements and cancellations remains unclear.”