AGC Data DIGest: October 6-11, 2021

Seasonally adjusted construction employment stood at 7,447,000 in September, up 22,000 from August, according to AGC figures. analysis from Bureau of Labor Statistics (BLS) data Posted on Friday. The September total was 201,000 (-2.6%) below the pre-pandemic peak in February 2020. Employment in residential construction, comprising residential construction and specialist contractors, increased by 3,400 in September, bringing the total to 80,000 (2.7 %) is higher than in February 2020. Employment in non-residential construction – construction, specialized crafts and heavy and civil engineering – increased by 18,600 after five consecutive declines, bringing the total of 281,000 (-6.0%) below the level of February 2020 came. Non-residential employment has regained only 56% of the jobs lost between February and April 2020, compared to 78% for total non-farm wage earners and 117% for residential construction. In September, a total of 444,000 former construction workers were out of work, a 37% year-on-year (y/y) decline from September 2020. The sector’s unemployment rate stood at 4.5%, non-seasonally adjusted, in September, compared to 7.1% in September 2020 and the third lowest September percentage in the series’ 22-year history. (The only lower rates for September were 4.1% in 2018 and 3.2% in 2019.) Construction average hourly wages in September were $33.25, seasonally adjusted, up 4.5% year-over-year and a 7.8% premium over the non-farm private sector average ($30.85, up 4.6% year-on-year). In September 2018, the construction premium was 10.5%. The premium has fallen as employers with historically low wages, such as restaurants and warehouses, increase starting salaries.

“Concerns about price inflation and ongoing labor shortages have dampened optimism among construction managers, but general confidence in the market remains strong, [as] can be seen in the results of the latest ENR Construction Industry Confidence Index,” Engineering News-Record reported Sept. 27. [following a record] gain in Q2 [the second quarter of 2021 but] remains at the second highest level” since Q3 2018. “The measure is based on responses from industry executives to surveys sent between August 9 and September 20 to U.S. companies on the ENR lists of leading general contractors, subcontractors and design firms….Execs remain confident in the economy in the short term, but doubts have crept over the medium term. Only 14% view the current US economy as in decline, but that number jumps to 24% when looking at the 12-18 month outlook. Individual market segments have remained strong,” including distribution/warehouses, hospitals/healthcare, transportation, multi-unit residential, industrial/manufacturing and water/sewage. “The most notable drop was in the entertainment/theme parks/cultural market.”

Roofing materials, including “roof insulation, insulation and membrane fasteners, some membrane products and roof accessories are still in short supply,” the National Roofing Contractors Association wrote in a September “Industry Issue Update.” “Manufacturers report expected turnaround times for fulfilling newly placed orders for some materials and products of four months or more, with some large orders having a turnaround time of 12 months… recently several manufacturers have introduced new policies based on prices at the time shipping rather than at the time the order is placed This puts roofers in the position of not having actual material and product prices at the time of making a proposal or offer and contracting with a building owner… in the After Hurricane Ida,… roofing manufacturers were faced with force majeure declarations regarding supply contracts and shipments from raw material suppliers.These include MDI, steel bars used in the manufacture of fasteners, glass mats used in asphalt shingles and some roofing membranes, and some special chem icals that are in different [of] roofing products….NRCA expects the current situation of roofing material and product shortages, long lead times and significant price volatility to continue through 2022.” More recently, on October 4, Firestone Building Products announced a “up to 15%” price increase for roofing membranes, effective October 15, or after October 15, with additional 10% price increases effective January 1, 2022. The reader who reads this Message sent A message was also sent from Sika Sarnafil with a 10% surcharge as of October 11, plus additional increases of 10-25% as of January 1. The reader added: “We have received similar letters from all manufacturers with 10%-30% price increases for material delivered in Q1 2022.” Readers are invited to send price and supply chain information to: [email protected].

Price increases continue for raw materials for selected construction inputs. “U.S. crude rose more than 2% early Monday to its seven-year high of $81.50 a barrel, raising more than 120% since late October,” the Wall Street Journal reported online today. Copper prices are about 10% below May’s record, but US natural gas futures on October 5 hit a nearly 13-year high at $6.31 per million UK thermal units, pushing their progress for the year at nearly 150% brings [before] a recent retreat” to close at $5.57 on Friday.

Market data collected in August by analytics firm EquipmentWatch “found that the average age of construction equipment is up 12% at resale and 14% at auctions,” ENR reported Sept. 27. “Although scarcity is not at a crisis point, [Heather Messing, the firm’s analytics lead] expects high sales and auction prices to continue as equipment manufacturers struggle to resolve supply chain issues. ‘I did not hear it’ [original equipment manufacturers] say their supply chains will straighten themselves out, so it’s hard to make the argument that there will be a return to normal pre-pandemic [pricing] levels soon.”

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