Nonresidential Construction Spending Continues Decline Amid Supply Chain, Labor Challenges

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Overall construction spending declined in May compared to the prior month, driven by continued drops in nonresidential construction activity as firms struggle with supply chain disruptions, rising materials prices and labor shortages, according to an analysis of new federal construction spending data by the Associated General Contractors of America. Officials with the association called on the Biden administration to remove tariffs on key construction materials, allow unemployment supplements that are keeping people out of the workforce to expire and take steps to address supply chain backups.   “Many construction firms would likely be even busier if only they could find … Read more

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Pullback in Commercial, Institutional Planning Ends 6-Month Consecutive Gains

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Following six months of consecutive gains, the Dodge Momentum Index fell to 165.8 (2000=100) in June, down 5% from the revised May reading of 175.1. The momentum index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The decline in June was the result of losses in both institutional planning, which fell 7%, and commercial planning, which lost 4%. . Uncertain demand for some building types (such as retail and hotels), higher material … Read more

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Construction Employment Trails Pre-COVID Levels in 91 Metro Areas, Says AGC

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Construction employment declined in 91 metro areas and was stagnant in another 24 between February 2020, the last month before the pandemic, and May 2021, according to an analysis by the Associated General Contractors of America of government employment data. They said the high number of metro areas losing construction jobs during that time frame reflected the impacts of early pandemic shutdowns and more recent challenges procuring construction materials and finding qualified workers to hire.   “The devastating job losses of early 2020 and more recent materials and labor challenges since then have kept industry employment stagnant or lower this … Read more

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Commercial Construction Contractors Upbeat on Outlook Despite Worsening Material Shortages, Worker Shortages

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Contractors continue to face a shortage of building materials like lumber and steel, while cost fluctuations for the building products are having increasing impact on business, according to second quarter data from the U.S. Chamber of Commerce Commercial Construction (Index). This quarter, 84% of contractors are facing at least one material shortage. Almost half (46%) of contractors say less availability of building products has been a top concern lately, up from 33% who said the same last quarter. Despite the materials challenges, the overall Index score rose three points to 65 (its highest reading since a score of 74 in … Read more

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ABC’s Construction Backlog Inches Higher in May, Materials + Labor Shortages Suppress Contractor Confidence

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Associated Builders and Contractors reports that its Construction Backlog Indicator rose to 8.0 months in May, according to an ABC member survey conducted from May 20 to June 2, 0.1 months higher than in April 2021 and May 2020. While ABC’s Construction Confidence Index readings for sales increased modestly in May, confidence regarding profit margins and staffing levels slipped. All three indices remain above the threshold of 50, indicating expectations of growth over the next six months. “Nonresidential construction backlog continues to edge higher, consistent with expectations that sales, profit margins and staffing will expand over the next six months,” … Read more

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