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20,000 more construction jobs nationwide in November; price hikes, supply problems persist: AGC analysis

Construction jobs have grown in November while price hikes for essential construction materials like diesel fuel and electrical components persist, an analysis from Associated General Contractors of America showed. While construction professionals find themselves with steady business, increasing prices and growing backlogs are catching up.

There were 7,750,000 people working across the nation in construction in November, a 20,000 increase from the total in October and 248,000 year-over-year, or a 3.3% increase, Bureau of Labor Statistics data showed. Residential construction employment increased by 3,900 jobs last month and 105,000 or a 3.4% increase year-over-year, while nonresidential construction employment grew by 300 and 143,000 or a 3.2% increase year-over-year.

Of the two sectors, specialty trade contractors were up by 5,500 and building contractors down 2,600 in residential construction. Nonresidential construction employment increased to 8,200 building contractors and 2,800 more specialty trade contractors in the field. BLS data showed there were less experienced construction workers without jobs, decreasing 76,000 or a 16% decrease year-over-year to 393,000.

The industry’s unemployment rate tied with 2018’s rate, dropping from 4.7% to 3.9% in November, the report added. Construction workers in nonsupervisory craft and office positions were making $32.94 per hour, a 6.1% increase year-over-year. That’s more than the 5.8% increase for all such private-sector employees, AGC analysts said.

The “premium” for hourly construction workers was below the average premium from 2000-2019 of 21.5%, analysts added. The premium rose to 17.2% over the private sector average of $28.10.

Economic activity in the services sector has steadily grown for 30 months now, but not without an increase in prices, an Institute for Supply Management report showed. Construction and homebuilding reported growth in 13 sectors, including increases in business activity, new orders and employment, but also order backlogs and slower supplier deliveries. Significant construction items like diesel fuel for two months in a row and electrical components for 22 months had price increases.

Meanwhile, steel products were down in price, the ISM report showed. Concrete and transformers were among items listed in short supply for the past several months.

The Dodge Momentum Index, a monthly measure for planned nonresidential building projects to lead spending for buildings by a year, rose 3.8% in November from October and 26% year-over-year, the Dodge Construction Network reported. The index’s institutional component rose 2.7% for the month and 21% year-over-year and the commercial component increased 4.3% and 28% respectively.

“Commercial planning experienced a healthy increase in hotel and data center projects and modest growth in stores and office projects,” index analysts said in the report. “While education and healthcare projects slowed in November, the institutional component remained net-positive alongside a robust increase in planning projects for government administrative buildings and religious facilities.”

States also faced cost hikes between 20-40% for highway projects, depending on the region and materials, American Association of State Highway and Transportation Officials director of policy and government relations Susan Howard said.

In Ohio, transport officials will get nearly $2 billion over five years from the $1.2 trillion federal bipartisan infrastructure law. So far, the money they’ve received “has largely been gobbled up by inflation,” Ohio Department of Transportation spokesperson Matt Bruning said. “It didn’t take all of it, but we’re pretty close to a net sum zero because of it,” he added.

Across the U.S. voters approved tens of billions of dollars for local projects like road-paving and school-building in last month’s elections, the Wall Street Journal reported. A total of $57 billion out of the $63 billion in ballot measures were approved, data from S&P Global Market Intelligence showed. The total amount of municipal debt will come to about $90 billion if the 90% approval rate holds steady – that’s the most from any election day in the data, going back to 2012, the newspaper reported.

Texas had the most spending with $35 billion, and fast-growing projects in the South and West dominated the flow of money, the WSJ reported.

A survey found 64% overall and 81% of third-party logistics companies, or 3PLs, planned to expand their real estate footprint over the next three years regardless of economic uncertainty, CBRE reported. “Of these companies, 47% say that they are planning to expand by more than 10%, while 29% say they plan no change, but only 7% expect to downsize,” real estate firm officials said.

3PLs are in the lead for building more space and 75% of food and beverage, building materials and construction companies will also aim to expand their footprints despite hardships like supply chain disruptions, labor shortages and high occupancy costs, the CBRE report showed. However, only 25% of manufacturers expect to expand.

About Ethan Duran

Ethan Duran is the construction and development reporter at The Daily Reporter. He can be reached at (414) 551-7505 or [email protected]

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