Investment in nonresidential structures contracted at an annual rate of 7.3% during the third quarter of 2021 and has now contracted during seven of the past eight quarters, according to an Associated Builders and Contractors (ABC) analysis of data released by the U.S. Bureau of Economic Analysis.
Associated Builders and Contractors is calling attention to a new report that highlights the negative economic impact of controversial government-mandated project labor agreements on nonunion construction workers, who comprise 87.3% of the construction industry workforce.
“In addition to ongoing, global supply chain disruptions, which in many instances are worsening, transportation costs are surging due to rising fuel prices and insufficient capacity. This will put additional upward pressure on input prices which could cut contractor profit margins,” said ABC Chief Economist Anirban Basu.
“Nonresidential construction backlog declined for a second consecutive month as skills and input shortages hammer the industry,” said ABC Chief Economist Anirban Basu.
The construction industry added 22,000 jobs on net in September. Overall, the industry has recovered 912,000 (81.9%) of the jobs lost during earlier stages of the pandemic.
Among those not in the labor force in September, 1.6 million persons were prevented from looking for work due to the pandemic. Employment in construction is 201,000 below its February 2020 level.
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"The COVID-19 pandemic has already created and accelerated a host of challenges for the construction industry, including a skilled workforce shortage, rising material costs, supply chain disruptions, jobsite shut-downs, additional health and safety protocols and new government regulations. The forthcoming ETS only adds to this long list of concerns," the statement read.
Higher materials prices and labor costs have put more projects on hold and, in many cases, rendered projects infeasible, ABC Chief Economist Anirban Basu said.
