“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.
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.
