Submitted by the AGC.
AGC is conducting the 2023 Hiring and Business Outlook Survey. Construction firm readers are invited to complete the survey by Friday, December 9. Results will be released in early January.
On Monday, AGC posted the December update of the Construction Inflation Alert, a 9-page document intended to inform owners, officials, and others about the materials cost, supply chain, and labor availability challenges that construction firms are experiencing.
Construction employment, seasonally adjusted, totaled a record-high 7,750,000 in November, an increase of 20,000 from the upwardly revised October total and 248,000 (3.3%) year-over-year (y/y), according to AGC’s of analysis of data the Bureau of Labor Statistics (BLS) posted on Friday. Residential construction employment, rose by 3,900 in November (with specialty trade contractors up 5,500 and building contractors down 2,600) and 105,000 (3.4%) y/y. Nonresidential construction employment climbed by 300 for the month (building contractors, up 8,200; specialty trade contractors, up 2,800; and heavy and civil engineering construction firms, up 5,300) and 143,000 (3.2%) y/y. The number of unemployed jobseekers with construction experience fell by 76,000 (-16%) y/y to 393,000, and the industry’s unemployment rate declined up from 4.7% to 3.9% tying the 2018 rate for the lowest ever for November. Seasonally adjusted average hourly earnings for production and nonsupervisory employees in construction (craft and office) rose 6.1% y/y to $32.94 per hour. That exceeded the 5.8% increase for all such private-sector employees. The “premium” for hourly construction workers rose to 17.2% over the private sector average of $28.10 but remained considerably below the average premium in 2000-2019 of 21.5%.
“Economic activity in the services sector grew in November for the 30th month in a row,” the Institute for Supply Management reported on Monday. All 18 sectors reported an increase in prices paid. Construction (including homebuilding) is among those that reported growth (13 sectors); increases in business activity (13), new orders (12), employment (9), and order backlogs (8); and slower supplier deliveries (9 sectors). Items significant for construction reported up in price included construction services, diesel fuel (2 months in a row), and electrical components (22 months). Steel products were listed as down in price. Items listed in short supply included concrete (2 months) and transformers (3 months).
The Dodge Momentum Index rose 3.8% in November from October and 26% y/y, Dodge Construction Network reported today. The index “is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.” The institutional component of the Momentum Index rose 2.7% for the month and 21% y/y. The commercial component increased 4.3% and 28%, respectively. “Commercial planning experienced a healthy increase in hotel and data center projects and modest growth in stores and office projects. While education and healthcare projects slowed in November, the institutional component remained net-positive alongside a robust increase in planning projects for government administrative buildings and religious facilities.”
“States have been seeing 20% to 40% hikes in [highway] project costs, depending on the region and materials, said Susan Howard, director of policy and government relations at the American Association of State Highway and Transportation Officials,” the Pew Stateline newsletter reported on Wednesday. “Ohio transportation officials are getting nearly $2 billion over five years from the $1.2 trillion federal bipartisan infrastructure law. But so far, the money they’ve received ‘has largely been gobbled up by inflation,’ said Matt Bruning, spokesperson for the Ohio Department of Transportation. ‘It didn’t take all of it, but we’re pretty close to a net sum zero because of it.’”
“U.S. voters said yes to tens of billions of dollars for road-paving, school-building and other local projects” in last month’s elections, the Wall Street Journal reported on November 13. “The voters approved $57 billion out of the $63 billion in ballot measures for which results are available, according to data from S&P Global Market Intelligence. If that 90% approval rate holds steady, the total amount of new municipal debt authorized Tuesday will come to about $90 billion, the most from any election day in the data, which goes back to 2012….Much of the money will be spent in the nation’s fast-growing South and West, with $35 billion in Texas alone, by far the most of any state.”
“CBRE’s Industrial [warehouse] Occupier Survey found that 64% overall and 81% of third-party logistics companies [3PLs] responding plan to expand their real estate footprint over the course of the next three years, in spite of economic uncertainty,” commercial real-estate firm reported on November 9. “Of these companies, 47% say that they are planning to expand by more than 10%, while 29% say they plan no change, but only 7% expect to downsize. When it comes to building more space 3PLs are in the lead with 81% planning to expand their footprint over the next three years, while 75% of both Food & Beverage, and Building Materials & Construction companies will do the same also intend to expand their real estate footprints despite supply chain disruptions, labor shortages and high occupancy costs. On the other hand,…only 25% [of manufacturers say they are] expecting to expand.”