Submitted by the AGC.
Construction input costs outpaced bid prices in February, according to Bureau of Labor Statistics (BLS) data posted on Tuesday. The producer price index (PPI) for material and service inputs to new nonresidential construction climbed 2.0% for the month and 21% year-over-year (y/y). The PPI for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—increased 0.6% for the month and 17% y/y. There were double-digit y/y increases in numerous input PPIs. The PPI for steel mill products soared 74% y/y despite declining 9.9% for the month. The index for diesel fuel jumped 14% in February and 57% y/y; aluminum mill shapes, 6.2% and 37%, respectively; plastic construction products, 1.3% and 36%; copper and brass mill shapes, 0.8% and 24%; lumber and plywood, 4.1% and 23%; gypsum products, -1.3% and 21%; asphalt felt and coatings, 2.1% and 21%; architectural coatings, 9.9% and 20%; insulation materials, 0.6% and 18%; truck transportation of freight, 2.0% and 19%; concrete products, 0.9% and 10%; and flat glass, 0.2% and 10%. Bid prices, as measured by PPIs for new buildings, rose 0.3% for the month and 29% y/y for new warehouse construction; 1.3% and 19%, respectively, for industrial buildings; 0.8% and 18% for offices; 0.3% and 15% for health care buildings; and 0.2% and 12% for school buildings. PPI increases for new, repair, and maintenance work by subcontractors amounted to 0.2% for the month and 18% y/y for concrete contractors; 0.5% and 13%, respectively, for roofing; 0.7% and 12% for electrical; and 0.5% and 9.6% for plumbing contractors. AGC posted tables and graphs of construction PPIs. Many of the y/y input price increases were the largest in the history of their respective series. Nevertheless, numerous producers have implemented even larger increases in the five weeks since BLS collected these prices on February 11. Readers are invited to send price and supply chain information to email@example.com.
Seasonally adjusted construction employment in January topped the February 2020 level in 29 states and lagged in 21 states and the District of Columbia, according to AGC’s analysis of BLS data posted on Tuesday. (February 2020 was the month in which employment peaked nationally before plunging during widespread shutdowns in March and April 2020.) Utah added the most jobs (10,400, 9.1%), followed by Indiana (8,600, 5.8%) and Missouri (7,100, 5.5%). The largest percentage gains were in Montana (11.4%, 3,500 jobs), followed by Idaho (10%, 5,500 jobs), and Utah. New York shed the most construction jobs over the period (-32,000, -7.8%), followed by Texas (-29,400, -3.8%) and California (-28,600, -3.1%). The largest percentage losses were in New York and North Dakota (-7.8%, -2,200 jobs), followed by Oklahoma (-6.7%, -5,500). For the month, construction employment increased in 27 states, declined in 19 states and D.C., and was flat in Delaware, Idaho, Nebraska and South Carolina. (BLS reports combined totals for mining, logging, and construction in D.C., Delaware, and Hawaii. Because there are few, if any, mining or logging jobs in these locations, AGC treats the levels and changes as solely construction employment.)
Construction employment, not seasonally adjusted, rose from January 2020 to January 2021 in 261 (73%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 58 (16%) and was unchanged in 39, according to an analysis AGC released on Thursday. (BLS reports combined totals for mining, logging, and construction in most metro areas, to avoid disclosing data about industries with few employers.) Houston-The Woodlands-Sugar Land added the most jobs (10,300 construction jobs, 5%), followed by the Dallas-Plano-Irving division (7,600 combined jobs, 5%) and Atlanta-Sandy Springs-Roswell (7,100 construction jobs, 6%). Cheyenne, Wyo. had the highest percentage gain (47%, 1,400 combined jobs), followed by Lake Charles, La. (21%, 3,100 construction jobs) and Weirton-Steubenville, W. Va.-Ohio (21%, 300 construction jobs). There was a new high for January in 69 areas and a new low in one area (Charleston, W. Va.), in series dating in most cases to 1990.
Total construction starts in current dollars (i.e., not inflation-adjusted) jumped 9% from January to February at a seasonally adjusted annual rate, data firm Dodge Construction Network reported on Wednesday. “Nonresidential building starts swelled 32% due to the start of three large manufacturing facilities. By contrast, residential starts fell 3%, and nonbuilding starts fell by less than 1%. Without the three large manufacturing projects, total construction would have declined 6% in February. Year-to-date, total construction was 14% higher in the first two months of 2022 than in the same period of 2021. Nonresidential building starts jumped 39%, nonbuilding starts rose 4% and residential starts gained 5%. For the 12 months ending February 2022, total construction starts were 16% above the 12 months ending February 2021. Nonresidential starts were 23% higher, residential starts gained 19% and nonbuilding starts were up 1%.”
Housing starts (units) in February rose 6.8% at a seasonally adjusted annual rate from the upwardly revised January rate and 22% from February 2021 to the highest rate since 2006, the Census Bureau reported on Wednesday. Single-family starts climbed 5.7% for the month and 14% y/y. Multifamily (five or more units) starts rose 0.8% and 37%, respectively Residential permits decreased 1.9% from January but rose 7.7% y/y. Single-family permits dipped 0.5% for the month but increased 5.4% y/y. Multifamily permits slid 4.5% for the month but rose 12% y/y. The number of authorized multifamily units that have not started—an indicator of potential near-term starts—soared 27% y/y.