Cost increases and supply-chain problems persisted. New South Construction Supply President and CEO Jim Sobeck reported in today’s monthly New South Construction News, “in my 45 years in this business, I’ve never seen such a demand/supply imbalance….The greatest impacts currently on the price of rebar are overall market demand and transportation costs.…Mills are reporting large backlogs with limited availability of sitting inventory. While pricing has remained firm over the past month, if availability becomes an issue, we can expect pricing to rise as a result. The other impacts currently affecting rebar are rising transportation costs and a truck shortage. As a result, one major mill has implemented a 7% increase on freight effective May 1. This increase will be effective on all purchase orders shipped on or after May 1 regardless of when the purchase order was submitted. [The] supply chain of wire mesh reinforcing has been decimated over the past two months. Both domestic and international wire rod shortages have crippled the flow of reinforcing mesh into the market. Shortages have been so impactful that multiple mills have had to shut down machines due to the lack of wire rod needed to produce both sheets and rolls. Even with the availability of mesh being constrained, demand for mesh continues to rise. Mill backlogs are massive and lead times are stretching out to over 12 weeks in some cases. This issue does not look to be resolved any time soon and expectations are for the wire mesh market to remain in a chaotic state for the foreseeable future. The polyethylene sheeting inventory and supply chain also remains constrained. While mills seem to be back up and running at full capacity, the downtime from the storms in South Texas in February is still having an impact. Lead times are slightly better than where they were last month but are still running in the 8-10 week range. While we expect inventory to remain tight in the short-term, poly inventory and availability should bounce back quicker than that of wire mesh mentioned above. Lumber…again posted up this week and settled anywhere from 40% to 80% up depending on species and size over the prior week’s numbers.”
AGC posted the recording of the April 14 webinar, “Soaring Material and Supply-Chain Costs and Delay.” Readers are invited to send cost and supply-chain information to ken.simonson@agc.org. In addition, readers are invited to submit information about requests they or their suppliers may have made for exemptions from tariffs or quotas on imported materials or components.
The Architecture Billings Index (ABI) reached its highest level since 2017 with a reading of 55.7 in March, 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 above 50 means that firms with increased billings outnumbered firms with decreased billings. Scores by practice specialty (based on three-month moving averages) increased from January and topped 50 for the second time in a row: commercial/industrial, 57.0 (up from 52.8 in January); mixed practice, 54.9 (up from 52.9); institutional, 54.4 (up from 50.6); and multifamily residential, 52.6 (up from 51.0).
The National Association for Business Economics released its latest quarterly Business Conditions Survey today of 97 corporate economists, including 65 who reported on their firms’ capital spending on structures. For the fifth consecutive quarter, more respondents in the first quarter (Q1) of 2021 reported a decrease (15%) than an increase (11%), compared to Q4 2020. Nevertheless, this net reading of -5 percentage points (based on unrounded results) was the smallest since Q4 2019. For the first time since that survey, the net reading for expected capital spending on structures in the next three months was slightly positive, by 2 percentage points.
U.S. resident population totaled 331.4 million on April 1, 2020, an increase of 7.4% (22.7 million) from 308.7 million on April 1, 2010, the Census Bureau reported today in releasing the first results from the 2020 demographic census. The overall growth rate slowed sharply from the 9.7% rate (27.3 million persons) in the previous decade and was the second-slowest of any decade since the first census in 1790, barely exceeding the 7.3% growth in the 1930s. Utah was the fastest-growing state, 18.4%; followed by Idaho, 17.3%; Texas, 15.9%; North Dakota, 15.8%; and Nevada, 15.0%. However, each of these states grew more slowly than in the 2000s. Unlike the previous decade, when every state and District of Columbia added residents, three states lost population: West Virginia, -3.2%; Mississippi, -0.2%; and Illinois, -0.1%. Growth accelerated from the 2000s to the 2010s in only 11 states and D.C., with the largest acceleration occurring in North Dakota (from 4.7% in the 2000s to 15.8%), D.C. (from 5.2% to 14.6%), and Massachusetts (from 3.1% to 7.4%). In addition, the bureau released counts of “apportionment population” (residents plus overseas population based on their last state) which are used to apportion the 435 House seats. Because of slower overall growth and reduced state-to-state migration, only 13 states gained or lost seats, the fewest since Congress enacted the current apportionment method in 1941. Resident population is one factor in determining the allocation of an estimated $1.5 trillion of federal aid to state and local governments, including many programs affecting construction, while a change in the number of representatives affects a state’s clout in Congress.
“Texas will add 10 gigawatts (GW) of utility-scale solar capacity by the end of 2022, compared with 3.2 GW in California,” the Energy Information Administration wrote in its “Today in Energy” posting on Wednesday. “One-third of the utility-scale solar capacity planned to come online in the United States in the next two years (30 GW) will be in Texas….We expect the state to add another 4.6 GW of solar capacity in 2021 and 5.4 GW in 2022….Almost half of the additions during this time period will be solar, surpassing wind (35%) and natural gas (13%) additions.”
