Construction Officials Caution Rising Materials Prices Threaten to Undermine Economic Recovery

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Unprecedented price increases for a wide range of goods and services used in construction pushed up contractors’ costs by a devastating 26.3% from June 2020 to June 2021, according to an analysis by the Associated General Contractors of America of government data. Association officials cautioned that rising materials prices are making it difficult for many construction firms to benefit from the re-opening of the economy, undermining the sector’s ability to add new, high-paying jobs. “Contractors have been pummeled in the past year by cost increases, supply shortages and transport bottlenecks,” said Ken Simonson, the association’s chief economist. “Meanwhile, falling demand … Read more

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Association Officials Report Construction Employment Declines by 7,000 in June

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Construction employment declined by 7,000 between May and June as the industry still employs 238,000 fewer people than before the pandemic, according to an analysis by the Associated General Contractors of America of government data. Association officials said that job losses in the nonresidential construction sector offset modest monthly gains in residential construction as many firms struggle with worker shortages, supply chain disruptions and rising materials prices. “It is hard for the industry to expand when it can’t find qualified workers, key building materials are scarce and the prices for them keep climbing,” said Stephen E. Sandherr, the association’s CEO. … Read more

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Construction Employment Trails Pre-Pandemic Level in 39 States, Reports AGC

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Construction employment in June remained below the levels reached before the pre-pandemic peak in February 2020 in 39 states, according to an analysis by the Associated General Contractors of America of government employment data. Association officials noted that many construction firms are struggling to cope with supply chain challenges and rising materials prices, which is undermining demand for new projects and impacting firms’ ability to hire new workers. “The construction industry is a long way from full recovery in most states, in spite of a hot homebuilding market in many areas,” said Ken Simonson, the association’s chief economist. “Soaring materials … Read more

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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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