Seasonally adjusted construction employment in February trailed the pre-pandemic February 2020 level in 44 states and the District of Columbia and exceeded it in six states, according to AGC’s analysis of Bureau of Labor Statistics (BLS) data posted today. Texas lost the most construction jobs 12 months (-56,400 jobs or -7.2%), followed by New York (-41,100, -10%), California (-35,000, -3.8%), and Louisiana (-20,800, -15%). Louisiana experienced the largest percentage loss, followed by Wyoming (-14%, -3,200 jobs) New Jersey (-11%, -18,200), and New York. Utah added the most jobs (6,700, 5.9%), followed by Idaho (4,500, 8.2%), (3,300, 2.9%). Idaho added the highest percentage, followed by Utah. Construction employment decreased from January to February in 35 states, increased in 11 and was unchanged in four plus D.C. New York had the largest loss of construction jobs for the month (-15,600 or -4.1%), followed by Indiana (-6,100, -4.1%), Illinois (-5,600, -2.6%), and Iowa (-5,500, -6.9%). Iowa had the largest percentage decline, followed by Kansas (-4.9%, -3,100 jobs), New York, and Indiana. Utah added the most construction jobs and the highest percentage over the month (3,000 jobs, 2.5%, followed by South Carolina (2,200 jobs, 2.2%). (BLS reports combined totals for mining, logging and construction in D.C., Delaware and Hawaii.)
Materials costs and supply-chain problems continued to sort this week. AGC posted a Construction Inflation Alert and scheduled a webinar on April 14, 3:30-4:30 pm EDT, to provide information about developments and possible steps to take. Readers are invited to email information about construction costs and supply-chain issues to ken.simonson@agc.org.
The blockage since Tuesday of the Suez Canal by a beached containership has reportedly held up more than 200 ships. While construction is less dependent than other sectors on traffic through the canal, there are likely to be ripple effects, given a shortage of containers in Asia and delayed shipments to the U.S. from Europe of manufactured goods that depend on parts from Asia. On Thursday, Reuters cited the “deputy managing director of Germany's BDI industry association, Holger Loesch, [as] saying earlier shipping holdups were already affecting output, especially in industries depending on raw materials or construction supplies.”
The canal shutdown may add to a rapidly lengthening list of delays and price hikes. One reader on Tuesday forwarded a letter from a steel-joist supplier warning, “Pricing per ton is at record levels and lead times are drastically increasing. We have received guidance from all our material vendors that the next 90 days are going to be especially challenging. We have been told to expect potential delivery delays related to upstream material shortages as well as continued pricing pressure if material can be sourced. With current mill backlogs, we are now looking at potentially 30+ weeks from receiving an order to delivery. This lead time has gone up 6 weeks in the last 10 days.” Two readers sent price lists from building-products suppliers announcing a 20% price increase for gypsum wallboard products and 5%-15% for insulation, “steel and accessories,” joint treatment/finishing products, and acoustical products, effective April 5. A pipe supplier notified one reader, “PVC conduit pipe earliest availability from manufacture[r] is May. [The vendor] s currently quoting under a force majeure. pipe availability and pricing may or may not be available at time of purchase.”
New South Construction Supply reported on Wednesday, “All three major [rebar]mills in the Southeast announced a $40 per ton increase on March 9” and 10. “Wire mesh reinforcing also saw increases in March,’ with one mill adding a second increase three weeks later. “The product seeing the most impact in March was polyethylene sheeting. The recent winter storms in Texas completely upended the resin and poly production in that region. Not only was manufacturing time lost due to the storm, but equipment and some facilities experienced major damage. These damages and production delays have caused multiple poly manufacturers and resin manufacturers to declare force majeure on many of their products. Poly sheeting pricing has seen increases of almost 20% in just the past month with more expected to follow. We expect poly sheeting pricing and supply to be a major issue for the remainder of 2021.”
“Engineering and construction costs increased for the fifth consecutive month in February,” IHS Markit and the Procurement Executives Group reported on Wednesday, noting increases for carbon steel pipe, fabricated structural steel, copper (for the eighth month in a row) and ocean freight from both Europe and Asia (seventh month). “Survey participants’ responses noted increases for all categories under the materials and equipment sub-index for the third month in a row in March.” The sub-index for current subcontractor labor costs also jumped, “indicating labor price increases were even more widely felt among respondents than in February.”
The Architecture Billings Index (ABI) topped the breakeven 50 mark for the first time in a year with a reading of 53.3 in February, seasonally adjusted, up from 44.9 in January, the American Institute of Architects reported on Wednesday. AIA says, “The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.” The ABI is derived from the share of responding architecture firms that report a gain in billings over the previous month less the share reporting a decline in billings, presented on a 0-to-100 scale. Any score below 50 means that firms with decreased billings outnumbered firms with increased billings. All four ABI scores by practice specialty (based on three-month moving averages) increased from January: mixed practice, 52.5 (up from an upwardly revised 50.7 in January); commercial/industrial, 50.5 (up from 48.4 and above 50 for the first time in 13 months); residential (mostly multifamily), 48.2 (up from 45.9); and institutional, 47.8 (up from 44.1).
