Submittted by the AGC
The impacts of the coronavirus pandemic on construction continue to increase. AGC’s second survey, conducted March 23-26, drew 1,640 respondents, of whom 39% answered “yes” to the question: “Did an owner direct you to halt or cancel construction on their own current project or one expected to start in the next 30 days?” Also, 18% reported that a state or local official or agency had ordered them to halt or cancel construction. In the previous survey (March 17-19), 28% had replied “yes” to a combined owner/public order question. In addition, 45% reported various causes for project delays or disruptions: shortage of materials, equipment (including personal protective equipment for their workers) or parts, 23%; shortage of essential craftworkers (including subcontractors’ workers), 18%; shortage of government workers (whether to issue permits or certificates of occupancy, or to conduct inspections or lettings, or to make project awards), 16%; potentially infected person had visited a jobsite, 13%. About 35% of respondents said suppliers had notified them or their subcontractors that deliveries will be late or canceled, up from 22% the previous week. About 8% said they had contracted to do additional work on medical or other facilities. Readers (including previous respondents) are invited to visit https://www.agc.org/coronavirus for a wide range of resources and a link to take AGC’s latest survey. Data provider ConstructConnect has an interactive state map it updates daily with a nationwide count of delayed projects and links to each one. The National Association of Home Builders has a map with links to state and local orders affecting construction (not just homebuilding).
The American Institute of Architects posted a special mid-month version of its monthly survey of architecture firms. Half “reported fewer new design projects for March—as of the March 23 survey date—as compared to their expectations entering the month. The percentage increased to 59% for new inquiries for design work. In terms of work on active projects, [83%] are anticipating a decline in revenue for March relative to their expectations heading into the month, with over a third of firms estimating that their revenue will be at least 10% below expectations. This situation is anticipated to worsen in April, with 94% of firms expecting revenue declines, and over half of firms (57%) anticipating that the revenue falloff will exceed 10%.”
Seasonally adjusted construction employment increased from February 2019 to February 2020 in 42 states and declined in eight states and the District of Columbia, an AGC analysis of Bureau of Labor Statistics (BLS) data released on Friday shows. (The “reference” period for the data was the week of February 12, when there were still very few coronavirus-related layoffs.) The largest year-over-year (y/y) additions increase in construction jobs occurred again in Texas (35,700 jobs, 4.7%), followed by Florida (25,000 jobs, 4.5%) and California (24,000 jobs, 2.8%). The largest y/y percentage gain occurred in New Mexico (8.8%, 4,200 jobs), followed by North Dakota (7.6%, 2,100) and Utah (7.3%, 7,800). Louisiana lost the most construction jobs over 12 months (-8,200 jobs, -5.5%), followed by West Virginia (-4,700, -12%). The largest percentage loss occurred in West Virginia, followed by Louisiana and Vermont (-5.2%, -800). Construction employment rose from January to February in 37 states and D.C., decreased in 11 and was flat in Oklahoma and Vermont. Employment reached a new high (in records back to 1990) in Idaho, Nebraska, Pennsylvania, South Dakota and Texas. (AGC’s rankings are based on seasonally adjusted data, which in D.C., Hawaii and Delaware is available only for construction, mining and logging combined.)
Construction costs increased again in March, IHS Markit and the Procurement Executives Group reported on Wednesday. “The current headline [index] registered 50.2, a figure barely above the neutral mark. The last time the headline index registered an almost flat pricing was in November 2016. After 40 months, the materials and equipment index came in at 49.4, indicating falling prices….Survey respondents reported falling prices for five out of the 12 components within [that] index. These included ocean freight (Asia to U.S. and Europe to U.S.), fabricated structural steel, carbon steel pipe, copper-based wire and cable. Prices for five categories rose while prices for…alloy steel pipe and exchangers…remained the same. Index figures for all categories dropped relative to February, indicating that a greater proportion of the respondents are observing lower prices.” The subcontractor labor index showed continued price increases, with an index reading of 52.0.
The Census Bureau released 2019 population estimates for counties and metro- and micropolitan areas on Thursday. Population change over time is a key indicator of demand for numerous types of construction, sources of state and local tax revenue, and availability of labor. The metros with the largest population gains between the last census in April 2010 and July 2019 were Dallas-Fort Worth-Arlington (1,206,599, 19%), Houston-The Woodlands-Sugar Land (1,145,654, 19.4%) and Phoenix-Mesa-Chandler (755,074, 18%). “Medium-size metro areas, like Las Vegas, have also moved up the ranks of gainers, as have Charlotte, N.C.; Seattle; and Austin,” the New York Times reported on Thursday. In contrast, 91 (24%) of the 384 metro areas experienced a decline in population. “Large metro areas had the steepest decline over the course of the decade, [William Frey, chief demographer at the Brookings Institution,] found in an analysis, with the growth rate down by nearly half. Rural areas, in contrast, grew slightly by the end of the decade, though that followed several years of declines. Places that had once been popular destinations for young people—New York, Los Angeles and Chicago—ended the decade with some of the biggest declines.” Of the nation’s 3,145 counties, 1,459 (46%) gained population and 1,683 (54%) lost population. Of counties with a population of 20,000 or more in 2018 and 2019, Williams County, N.D., grew the fastest, 68% (from 22,399 in 2010 to 37,589).