Construction employment, not seasonally adjusted, increased from July 2020 to July 2021 in 268 (75%) of the 358 metro areas (including divisions of larger metros) for which the Bureau of Labor Statistics (BLS) posts construction employment data, decreased in 54 (15%) and was unchanged in 36, according to an analysis AGC released. (BLS reports combined totals for mining, logging, and construction in most metro areas, to avoid disclosing data about industries with few employers; AGC assumes the construction-only changes in these areas match the combined change.) The Seattle-Bellevue-Everett division added the most jobs (10,200 construction jobs, 10%), followed by Sacramento—Roseville—Arden-Arcade, Calif. (9,100 construction jobs, 13%); Pittsburgh (8,300 construction jobs, 14%); the Chicago-Naperville-Arlington Heights division (7,700 construction jobs, 6%); and the Boston-Cambridge-Newton division (6,900 combined jobs, 10%). Waterbury, Conn. had the largest percentage increase (29%, 800 combined jobs), followed by the Lawrence-Methuen Town-Salem, Mass.-N.H. division (26%, 900 combined jobs); Hanford-Corcoran, Calif. (22%, 200 combined jobs) and Bloomington, Ill. (21%, 600 combined jobs). The largest losses occurred in Houston-The Woodlands-Sugar Land (-7,000 construction jobs, -3%), followed by New York City (-6,300 combined jobs, -4%); Miami-Miami Beach-Kendall (-3,500 construction jobs, -7%); Nassau County-Suffolk County, N.Y. (-2,400 combined jobs, -3%); and Calvert-Charles-Prince George’s, Md. (-2,400 combined jobs, -7%). The steepest percentage decline, -11%, occurred in Evansville, Ind.-Ky. (-1,100 combined jobs) and Atlantic City-Hammonton, N.J. (-600 combined jobs), followed by a loss of 9% in Tuscaloosa, Ala. (-600 construction jobs) and Victoria, Texas (-300 combined jobs).
Materials prices continue to rise for a variety of inputs. “Aluminum prices are reaching 10-year highs,” the Wall Street Journal reported today. “The rally sets aluminum apart from…copper, which retreated after the delta variant of covid-19 prompted investors to pare back bets on a roaring world economy.” On August 13, USG notified customers it would increase prices effective on September 13 by 20% for all wallboard products, 40% for all glass-mat products, 15% for all interior finishing products, and 10% for all bead and trim products. On Wednesday, Vulcan Materials Company notified customers it “will implement 2022 price increases at or near 11% across our markets, with less flexibility than you may have been accustomed to in the past.” On Thursday, New South Construction Supply reported, “One leading wire mesh manufacturer announced a price increase on August 13 [of] $40.00/ton across all mesh building products. Extremely high demand, little to no sitting inventory, and the increase in wire rod prices are driving these price increases. Which products to produce and corresponding lead times are now being determined by what raw materials are available and when. Wire mesh issues are expected to remain through the fourth quarter and into first quarter 2022….Unexpectedly, poly manufacturers announced another $0.05 per pound increase [roughly 5%] that went into effect on August [16,] almost exactly one month after the increase pushed through in July.” The BLS “Commissioner’s Corner” column on Friday discussed a variety of producer price indexes for construction.
Engineering and construction costs continued to rise in August, IHS Markit and the Procurement Executives Group reported on Wednesday. The report cites indexes with a scale of 0 to 100; values above 50 indicate increased current or expected costs. “The subcontractor labor index recorded 72.8, a 6.1 index point increase from the previous month, indicating a consensus for a quickening pace of labor costs increasing among respondents. In August, all categories within the materials and equipment index increased individually for the eighth straight month as well, though index-levels have fallen further from peak levels experienced earlier in the year for most categories….The six-month headline expectations for future construction costs index measured 54.5 in August, as respondents expect prices to continue increasing into the beginning of 2022. Yet, many of the sub-indices are showing measures much lower than 50.0….These sub-index totals are indicating that survey respondents are beginning to expect less input cost inflation than observed earlier in 2021. The fabricated structural steel sub-index fell from 50.0 in July 2021 to 34.6 this month. Carbon steel [and carbon] alloy steel prices are expected to decline over the next six months…Most survey respondents did not report any shortages for materials and equipment currently, though some respondents are reporting shortages for specific technical labor in the concrete and wire and cable industries. Respondents still note extremely high freight rates, delays for orders, and limited container availability.”
Parts shortages are adding to backlogs of more products. Door-lock manufacturer Allegion PLC’s “order backlog has doubled to three to four months of production as it waits for semiconductor chips and other electronic components to arrive for commercial lock systems,” the Journal reported today. “CNH Industrial NV, which makes New Holland farm machinery and Case construction equipment, has several thousand partially assembled earth-moving machines, tractors, and crop harvesters waiting for parts at plants.”
“U.S. battery power capacity grew by 35% in 2020 and has tripled in the last five years,” the Energy Information Administration reported on August 20 in its “Today in Energy” blog. “The trend is expected to continue; utilities have reported plans to install over 10,000 MW [megawatts] of additional large-scale battery power capacity in the United States from 2021 to 2023—10 times the capacity in 2019….Five states account for more than 70% of U.S. battery storage power capacity as of December 2020. California has the largest share at 31% (506 MW) of the U.S. total. Texas, Illinois, Massachusetts, and Hawaii each have more than 50 MW of power capacity.”
