The construction industry needs new blood; labor shortages exist everywhere, and methods of attracting new hires increase in complexity.
The construction industry needs new blood; labor shortages exist everywhere, and methods of attracting new hires increase in complexity.
Despite a tough eighteen months for the construction industry, residential construction proceeds at a break-neck pace. But increased costs and uncertain build schedules increase the difficulty of home construction. Construction spending sits 8.2% higher than one year ago.
Last week, Hyundai Heavy Industries purchased Doosan Infracore, creating a combined company in the top ten largest global construction equipment manufacturers. The plan makes Doosan Infracore a subsidiary of Hyundai Genuine group, of which Hyundai Construction Equipment is also a subsidiary. Both Doosan and Hyundai are South Korean companies. After the purchase, they will continue to operate independently.
According to new data released from the Bureau of Labor Statistics on August 12, nonresidential construction prices have increased 23.4% since this time last year, including a 0.8% increase over last month.
The $1.2 trillion infrastructure bill passed in the Senate last week includes an investment in construction technology of $100 million spread over five years. The government intends to focus the funds on digital construction technologies such as BIM, 3D modeling software, and digital project management.
The Commerce Department released a report on August 2nd indicating that construction spending inched up a slight 0.1% in June; this was a tradeoff as private projects increased and public sector construction projects dropped.
According to the Associated Builders and Contractors (ABC) report in conjunction with the U.S. Bureau of Labor and Statistics, the national construction unemployment rate dropped 2.6% in June compared to the same month last year. Forty-five states experienced decreases, though the rates have not rebounded back to pre-pandemic levels.
Based in Oakland, CA, the construction technology company Mighty Buildings raised $22 million last month, increasing its total funding to more than $100 million as it goes after the sustainable construction market. Mighty Buildings pursues a goal of creating net-zero carbon emission homes by 2028.
The Architecture Billings Index (ABI) released its report for May 2021, showing that the demand for architectural services is at a record high. The ABI measures demand through tracking signed contracts. It hit 58.5 in May, up from 57.9 in April. (Anything above 50 indicates an increase over the previous month. Anything lower than 50 marks a decrease.)
According to a new report from Associated Builders and Contractors, the construction industry—already short on workers before the pandemic—needs to hire 430,000 more laborers in 2021 for a total of 1,000,000before the end of 2022.
Dropping to the lowest price they've been since January, lumber fell 4% on Friday to $689 per thousand board feet; this represents a dramatic drop over the last nine weeks after the prices topped out at $1670 on May 7th.
The Manhattan Federal Court sentenced Vito Nigro, a New York construction executive, to 51 months in prison for evading taxes on more than $1.8 million in bribes he received from subcontractors.
Habitat for Humanity, the charity organization that builds homes for the disadvantaged, faces financial trials. The first blow came from the virus; safety precautions severely reduced the number of volunteers they could have onsite. The second came from the lack of revenue from closed ReStores, a chain of reuse stores Habitat for Humanity runs to partially fund their projects. The third blow came from supply chain issues—the same issues faced by all residential contractors.
After the federal government passed a bipartisan deal for $973 billion in infrastructure spending last Thursday, the S&P 500 posted its best week since April, closing out Friday at new record highs. Shares of construction giants Caterpillar, Martin Marietta Materials, and Vulcan Materials traded higher on the news.
Contractors know about massive price jumps in materials. Still, a new report from the federal government shows that non-residential construction input prices rose 23.9% in May over May of 2020, and the prices rose 4.8% since April.
A new report from the National Association of Realtors revealed a slowdown in construction over the past twenty years—primarily due to focus on single-family homes rather than multi-family houses. The result: a 5.5-million-unit shortfall.
Like the United States post-pandemic recovery plan, the European Union passed an €800 billion program to speed the continent's recovery. But now, construction executives and organizations warn that a rapid rise in construction costs may cause a significant speed bump in that plan and may stop the recovery altogether.
The economy added 559,000 jobs in May, and the unemployment rate fell from 6.1% to 5.8%. However, despite the job gains and a massive labor shortage that has plagued construction, the industry lost a net 20,000 jobs; this comes after an April with no increase in construction jobs.
The exploding residential market continues to skyrocket, rising as quickly as manpower and material supplies can accommodate. And yet, new national data from the first quarter of 2021 shows that existing homes sell for higher prices than new construction.
Due to high demand, of all industries, construction perhaps most seamlessly weathered COVID-19. Hence, construction workers enjoy premium pay. The United States Bureau of Labor Statistics (BLS) forecasts construction employment adding 4% year-on-year from now through 2029, compared to a national job average of 3.7%. The BLS expects to see the most growth in solar photovoltaic installers (up 50.5%), tile and stone workers (up 8.6%), and electricians (up 8.4%).
With single-family home starts down 13% in April, compared to March, many potential homeowners wonder why a slowdown persists during a period of high demand. The answer: lack of workers and scarcity of building materials.
A recent consensus from the American Institute of Architects predicted an 11% decrease in office construction. Tech-driven cities such as Manhattan, Boston, Seattle, Los Angeles, and the Bay Area drive the growth. Builders constructed 25 million square feet of office space in the first two months of 2021, with more coming.
While great economic times foster magnificent architecture—society builds few massive edifices during food shortages—two rising theories posit that booms in architecture could indicate a coming economic bust. More than that, one such theory blames architecture itself for the downturn.
The Dodge Momentum Index, a monthly measurement of nonresidential building projects in planning, jumped 8.6% last month, climbing to 162.4 over 149.5 in March; this happened despite hitting its nine-year low in January; the index grew 77% over the previous three months. Healthcare and laboratory projects lead the index, while commercial projects have slipped with fewer warehouses in production. Overall, the index sits 31% higher than in April of last year.
According to data from the Associated Builders and Contractors (ABC), spending declined in 11 of the 16 nonresidential subcategories. Private nonresidential spending fell 0.9%, while public nonresidential dropped 1.5% in March.
Despite the massive worker shortage plaguing construction, new figures from the Bureau of Labor Statistics show that homebuilders have slowed their hiring pace. The trend moves upward at a crawling pace.
With a season of extreme shortages in new home availability, promising signs of increased production might catch up with demand.
Curri, a new company referred to as the “Uber of Construction,” gains investors as it seeks to disrupt a stagnant distribution model.
Nobody in the construction industry sees the material shortage as new news; lumber has climbed more than 300% since March of 2020. According to a survey from the Associated Building Contractors, lack of materials competes for top concern among contractors, alongside the labor shortage.
Autodesk published its 2021 Construction Outlook, which analyzes the current construction situation and forecasts the upcoming year. In an interview with Forbes, Autodesk Senior VP and General Manager, Jim Lynch, gave an optimistic assessment: “The big takeaway is that the market is back.”
U.S. housing construction grew at the fastest pace since 2006 in March as builders recovered from the February weather-related slowdowns. Builders began construction on new homes at a seasonally adjusted rate of 1.74 million units in March, up 19.4% over February when building fell 11%. As the fastest boom in growth since the 2006 housing craze, some economists are pleased while others are wary.
Despite the blockbuster residential market, as a post-vaccination country re-opens for business as usual, construction industry problems remain. Two issues hang over the construction industry's head: material and supply chain and labor shortages.
The unemployment rate dropped to 6%, adding 916,000 jobs to the economy. The construction industry, with 110,000 new jobs, represented a significant portion of the employment growth.
The massive boom in residential construction remains in the news, even with a slowdown at the beginning of 2021. Most anticipate the market to stay strong throughout the remaining year.
This week in Texas, a federal grand jury returned an indictment on Michael Angelo Padron with one conspiracy charge to commit wire fraud and eight counts of wire fraud, along with two co-conspirators. According to the charges, Padron placed a service-disabled veteran, Ruben Villareal (one of the co-conspirators), as frontman at his construction company to acquire Small Business Association contracts reserved for veteran-owned businesses.
Both Dodge Data and Analytics (Dodge) and Associated Builders and Contractors (ABC) released reports this week that predict 2021's construction industry positives and negatives.
2021 looks to be a challenging year for construction, reports Jones Lang LaSalle (JLL), a worldwide real estate conglomerate. JLL predicts a 5% to 8% drop in overall nonresidential construction.
The IRS convicted Hugo Cruz-Medina, a 33-year-old from Jacksonville, Fl., of several counts of mail and wire fraud, conspiracy to defraud the United States, and illegally entering the country after being deported. He received a three-to-five-year sentence in federal prison and orders to pay his victims $3,266,506.33 in restitution, as well as a punitive amount of $1,408,712.08, which were the proceeds of his mail and wire fraud.
The Australian construction company Lendlease reported last week that its operating profit had fallen 26% from the same period in 2019, from AU $278 million (U.S. $219 million) to AU$205 million ($162 million.) It also cut its dividend by 50%.
Fortune magazine has published its annual ranking of most admired companies in all sectors, including construction and engineering. The category leader was AECOM, followed by Jacobs, Quanta Services, MasTec, and KBR.
The Associated General Contractors of America's "2021 Construction Hiring and Business Outlook" report uncovers a significant post-pandemic slowdown. The information also doesn't predict a return to typical construction in 2021.
Autodesk, the maker of Revit and AutoCAD, has acquired Spacemaker, an artificial intelligence-based software company to increase automation opportunities for its portfolio.
Residential construction saw a 5.8% increase in home starts in December over the previous month, putting the seasonally adjusted annual rate at 1.67 million homes. Compared with 2019, home starts were up 17%, the highest level since 2006, before the burst of housing bubble.
In recent years, mining has seen a huge surge in success. 2020 represented a banner year for domestic mining (not just in ore but also in aggregates and quarries).
According to PRNewswire, a new report, “Construction in China – Key Trends and Opportunities to 2024” shows massive construction undertakings in the country in the first half of the decade. This occurs amid slowdowns in United States construction due to material shortages.
Following the Carbon Free Boston report in 2019, city officials are making carbon-neutral plans by 2050. Emissions from buildings account for more than 70% of the city’s emissions, Boston feels it’s time to clear the air.
Last month saw a drop in 140,000 jobs, attributable to increases in COVID cases and efforts to contain the pandemic, said a report from the U.S. Bureau of Labor Statistics. However, there was good news for construction: the industry's jobs grew 51,000 in December.
The Q4 2020 numbers were released from the U.S. Chamber of Commerce Commercial Construction Index and reported that the number of material shortages was growing at an alarming rate, primarily due to the pandemic.
Covid cases are reaching massive numbers and breaking records again for the first time since the spring’s initial surge. Construction companies are looking for ways to survive the potential drought of work that may occur if lockdowns continue—as seen in the tens of millions of people under stay-at-home orders in California last week.
After a record 6,100,000 new jobs added to the US economy in October, November saw a massive plunge, gaining only 245,000 jobs, which is the slowest month’s gain in six months.
According to a new study from Advisor Smith, several of the country's highest-paid jobs that don't require a degree are in the construction industry.
US industrial construction is having a good year, all things considered. A report from the consulting group of Cushman and Wakefield shows that the industrial market has produced a total of 159 million square feet in the last three consecutive quarters. The third quarter made 61 million alone, which is 16% higher than in the same quarter in 2019.
According to a new report in the New York Times Thursday, residential construction rose 2.1% from July to August, while non-residential—which was already suffering—dropped another 4%. The one exception to this is distribution centers, which continue to be on the way up.
A study from McKinsey reported that a large majority of projects miss their deadlines by 40% or more, which causes all sorts of headaches—most of them financial. Some of the most common reasons for construction mistakes are:
According to Dodge Data and Analytics, nonresidential construction starts fell by 19% in the first five months of the year. In places where lockdowns were mandated, including construction jobs, work levels dropped as much as 80%. The Dodge study indicated that the delays were due to labor shortage, new safety procedures, and lack of materials and equipment due to transportation disruptions.
Core, a new app and online site, is designed to connect construction laborers with contractors and builders in need of workers. It has gotten the eye of several influential Silicon Valley investors.
Despite the many issues that are plaguing 2020, the Marcum Commercial Construction Index for the second quarter reports that the industry is maintaining a relatively even keel. In particular, unemployment in the construction industry has dropped back down to 8.9% after seeing record highs in April and March. The unemployment rate across all sectors is at 10.2%.
We all know that Covid-19 had a significant impact on the construction sector (though some places weathered the storm better than others), but some sectors of the industry have been harder hit than others. A recent survey from the consulting group Appleseed Strategy highlights where the hard hits have been and where the opportunities are—because it’s not all bad.
According to the most recent report from Dodge Data and Analytics, total construction starts for July fell 7%. This sharp drop was led primarily by a 31% dip in the non-building segment. (Nonbuilding consists of industrial, roads, public works, etc.) Nonresidential starts rose 3% and residential dropped 2%.
In a campaign organized by the European Architect’s Journal and backed by 14 Sterling Prize winners, a new push is being made to get businesses to renovate existing buildings rather than tear them down and rebuild—to fight climate change.
The architecture industry, which has long been looked at as a predictor of what the future holds, not just for construction but for the economy at large, is making some exciting moves as it recovers from Covid-19.
A new report out from Moody’s Analytics does not paint a rosy picture for the immediate future of America’s real estate and construction sectors. In a year that was supposed to have been record-breaking, real estate projects are estimated to move forward again at a pace that is slower than the recovery after the Great Recession.
This week the Department of Commerce reported that the economy shrank at the fastest rate ever recorded between April and June—32.9% in the second quarter of 2020. While construction has resumed and many projects are moving forward at the pace they were pre-pandemic, the overall toll that Covid-19 has had on the construction industry has been severe.
According to a new report from the American Institute of Architects (AIA), the decrease in construction spending that began with the pandemic is likely to continue well into 2021. Among all construction sectors, the commercial sector (which includes office, retail and hotels) will be the hardest hit, with spending projected to decline 12% this year and 8% more in 2021, according to the AIA Consensus Construction Forecast.
As the economy reopened for most states in June, there was a 17.3% upswing in housing construction, but the total production is still lower than it was before the lockdown.
We’ve heard conflicting reports over the past several months—sometimes the forecast is dire and other times it’s positive. But one area where there is definite suffering is in the architecture sector, which many consultants believe is the proverbial canary in the coalmine of construction: after all, if architects have nothing to design, then what is there to build?
Caterpillar, a stock that has been struggling for several quarters, was upgraded by forecasters and grading agencies on Wednesday, but that didn’t lead to much in trading shares. According to Barron’s, investors seem to have left construction equipment companies for dead.
Construction company No Limits Construction might need to revisit their hiring practices and do some more background checking on their new employees.
According to data collected by Procore and the Associated General Contractors of America (AGC), levels of production in the construction sector are returning to where they were before the coronavirus widespread outbreak in March.
According to business consultancy group McKinsey & Co, the construction industry will radically change as it undergoes nine shifts caused by the coronavirus pandemic. The report, The Next Normal of Construction, explains how “disruption is reshaping the world’s largest ecosystem.”
A 2018 study from Fails Management Institute (FMI), a management consultancy group, reported that 55% of engineering and construction firms were “actively seeking new technology solutions.” But at the same time, a 2019 study from Dodge Data and Analytics found that 90% of the contractors surveyed “do not specifically budget for innovation.”
The USG and U.S. Chamber of Commerce Commercial Construction Index, a gauge for the outlook and confidence in the commercial construction industry, dropped massively from 74 in Q1 to 56 in Q2. The reason for the dive is that two of the index’s three main indicators—confidence in new business and revenue expectations—both fell 26 points, to 50 and 44, respectively. The third indicator, backlog, dropped 3 points, to 73.
While construction was considered an essential service in much of the country during the heart of the lockdown, many factories were shuttered, as the disease spreads so quickly and dangerously through factory workers side-by-side during long shifts, often sweating and breathing hard. (See the massive shutdowns in meat processing plants for more examples.)
A study, “Global Construction Disputes Report 2020: Collaborating to Achieve Project Excellence,” was recently released by US-based Arcadis, and reports that construction disputes in North America are increasing, both in quantity and dollar amount, but declining globally. The report also suggests that we’re likely to see a sharp rise in post-COVID disputes, especially in regards to timeframes and deadlines.
The AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) the largest organization of unions in the United States, filed a lawsuit with OSHA to create an emergency workplace safety rule based on the coronavirus pandemic.
The Trump administration has decided to ease enforcement of environmental regulations covering some industries to help them cope with impacts from the coronavirus outbreak, the U.S. Environmental Protection Agency said on Thursday.
In an interview with construction website Construction Dive, Chuck Goodrich, CEO and president of the Indianapolis-based Gaylor Electric, which works in 27 different US states, says that not all is doom and gloom in the future of construction, as some have been predicting.
Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said that it will likely take years for the nation’s economy to recover from the COVID-19 pandemic’s blow.
According to a survey by the Associated General Contractors of America (AGC) and drawing date from construction technology firm Procore, the US construction industry shed nearly a million jobs in the last month.
According to the American Institute of Architects, the demand for design services saw its biggest plunge in recorded history in the month of March. Billings at architecture firms dropped 20.1 points to 33.3, the largest single-month decline in the 25 years that the Institute has been keeping track. By comparison, in the 2001 recession there was a 9.4 decline, and in 2008 an 8.3 decline.
In Orlando, Florida, the center of theme park and resort entertainment for half the country, there has been observed activity in the construction of Universal Orlando Resort, but Disneyworld and its adjoining parks, hotels and resorts remained shuttered.
US homebuilder sentiment in April dipped to its lowest level in over seven years, the steepest decline in the 30-year history of the National Association of Home Builders/Wells Fargo Housing Market Index.
After saying that all construction workers were essential in the time of crisis, the city of New York (which, at the time of writing, has seen more than 7,000 deaths from COVID-19) has eased off of that decision and has taken a much more cautious approach—one that is hurting the construction business.
It seems incredible to think that we’ve been writing for years about a shortage of skilled labor in construction, with companies desperate to find and secure new employees. But now, in just a few months, we’ve seen a remarkable number of construction companies furlough or lay off workers.
Even though construction is still mostly operating at capacity, architectural firms—particularly those that work on public works projects—are getting squeezed by the poor economy, and that predicts few construction projects down the pipeline.
While there are many stories of doom and gloom, especially around the economy, there are glimmers of hope. One in particular came from Keith Prather, a market intelligence expert for the business management consulting firm Pioneer IQ. They developed something called the “Fear and Recovery Curve” model to indicate when the crisis would end and what the recovery would look like. And the future, Prather says, is rosy.
In a letter addressed to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, the American Institute of Architects asked for improved aid, including loans and tax breaks, to help architecture firms amid the economic downturn caused by COVID-19.
With a third of the United States on lockdown, including the three largest cities (New York City, Los Angeles, and Chicago), something is continuing unabated—construction. In California, Governor Gavin Newsom labeled construction as an “essential service” alongside things like healthcare and food service. And while some construction projects are easily labeled as essential—things like road repair, and maintenance of water and transit infrastructure, it may be hard to understand what is so essential about the construction of housing or commercial projects.
The massive stay-at-home order issued by Governor Gavin Newsom of California, which restricts 40 million people to their home except for emergency trips to the store, the gas station, or the doctor, does not appear to affect the construction industry. Although it was not mentioned specifically in the executive order issued March 19th, a notice on the government’s website lists construction as one of the sectors not affected.
MEPI, an organization that focuses on infrastructure and construction in the Midwest, reports that their forecasts say that 2.7 million jobs currently done by laborers will be done by autonomous robots by the year 2057. As an example, they point to brick laying robots, which can lay thousands of bricks in a day, compared to human bricklayers, who average about 500.
In 2016, California construction company C.W. Driver began work on a new 94,000 foot school in Irvine, and the costs came in at $475 per square foot. Fast forward to 2019, and a similar school (both are K-8, and both in Irvine) is pricing out at $598 per square foot. That’s a 26% jump in just three years, and it’s not restricted to California.
Construction machinery stocks have trailed the S&P 500 by about 20% over the last year due to a variety of factors, including trade deals with China and the current state of unfavorable farming conditions. But despite these setbacks, data shoes that the global construction equipment industry is set to reach $90 billion this year, up from $70 billion in 2016. The same data shows that overall construction spending, which was at $1.3 trillion in 2019, will reach $1.45 trillion in 2023.