“Normally, one would look at headline numbers indicating that construction investment rose in America as a reason to cheer,” said ABC Chief Economist Anirban Basu. “But the construction spending data are not adjusted for inflation, and in real terms, construction spending was likely down for the month. Total construction spending is up more than 8% from last year, but materials prices are up approximately 24% over that span."
The construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor, according to a model developed by Associated Builders and Contractors.
“While many economists expect inflation to moderate over the course of 2022, as of now, there is effectively no relief in sight for the nation’s contractors,” said ABC Chief Economist Anirban Basu. “Inflation remains hot, hot, hot, with estimates of price increases repeatedly coming in above consensus expectations."
“Despite the omicron variant, ongoing supply chain issues, elevated energy and materials prices and rampant staffing shortages, the average nonresidential contractor remains upbeat,” said ABC Chief Economist Anirban Basu.
Associated Builders and Contractors has hired Joseph Xavier, a safety and workforce expert with more than 30 years of experience, as its senior director of health and safety. Xavier will lead and contribute to the development and deployment of the overall health, safety and environment strategy for the association, its 69 chapters and its more than 21,000 member companies.
The not seasonally adjusted national construction unemployment rate plunged 4.6% in December 2021 from a year ago, down from 9.6% to 5%, while all 50 states had lower unemployment rates over the same period, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released by Associated Builders and Contractors.
“There are at least a dozen explanations for today’s employment report, which indicates that nonresidential construction employment declined in January even as many other segments added many jobs,” said ABC Chief Economist Anirban Basu.
Kowalski Construction faced an extraordinary task in one of its recent projects. After a large fire ravaged one of Arizona’s largest malls, one-third of the shopping center was affected with heavy smoke and water damage. As one of the area’s only construction companies qualified to handle a job of this magnitude, they were asked to perform restoration services, but with a twist. Managers wanted to keep the mall open for business.
National nonresidential construction spending fell 0.7% in December 2021, according to Associated Builders and Contractors analysis. On a seasonally adjusted annualized basis, nonresidential spending totaled $820.7 billion for the month.
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased in December. All three indices stand above the threshold of 50, indicating expectations of growth over the next six months.
