"Nonresidential spending decreased in February despite inflationary pressures that should have driven it higher," said ABC Chief Economist Anirban Basu. "True, nonresidential spending is up 6.2% year over year, but given the significance of construction materials inflation, spending has almost certainly declined in real terms."
In this interview, Brett Lawton talks about scaling, growing as a leader and finding the company’s niche as a mid-sized service provider in a competitive, increasingly consolidated market. He also discusses offering general construction and restoration services, and the value of an executive team.
“It will get worse before it gets better,” said ABC Chief Economist Anirban Basu. “Not only has Russia’s assault on democratic Ukraine created supply challenges in a number of categories, including oil and natural gas, but the reemergence of COVID-19 in parts of Asia and Europe is also poised to produce additional impacts."
Survey respondents in all four regions cited labor and material availability and costs as the factors chipping away at their backlog, while a few respondents in the Midwest cited winter weather as a frustrating factor.
Associated Builders and Contractors issued the following statement from Michael Bellaman, its president and CEO, in reaction to U.S. President Joe Biden’s State of the Union address.
“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.
