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AGC Releases Numbers for December, 2021 Outlook

Thursday, January 14, 2021

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The Associated General Contractors of America released several sets of data last week regarding employment in the construction sector. Most recently, the group found that construction employment as a whole increased by 51,000 jobs in December, with gains for both the residential and nonresidential industries.

The surveys also show, however, growing pessimism for what 2021 will bring.

“December’s employment gains likely reflect milder weather than usual for the month rather than sustained demand for projects,” said Ken Simonson, the association’s chief economist. “In fact, our survey found contractors expect the volume of work is likely to decline for nearly all nonresidential project types, and most firms have experienced project cancellations or postponements.”

Construction employment came in at 7.41 million in December, an increase of .7% over November. The number remains about 3% behind the most recent peak last February.

ktsimage / Getty Images

The Associated General Contractors of America released several sets of data last week regarding employment in the construction sector. Most recently, the group found that construction employment as a whole increased by 51,000 jobs in December, with gains for both the residential and nonresidential industries.

The AGC’s “2021 Construction Hiring and Business Outlook Report,” which was based on survey results from more than 1,300 firms from all 50 states and the District of Columbia, found that the majority of contractors expect demand for many types of construction to shrink in 2021.

“The percentage of respondents who expect a market segment to contract exceeds the percentage who expect it to expand—known as the net reading—in 13 of the 16 categories of projects included in the survey,” the association said. “Contractors are most pessimistic about the market for retail construction, which has a net reading of -64%. They are similarly concerned about the markets for lodging and private office construction, which both have a net reading of - 58%.”

Some other net readings include:

  • -40% - higher education construction;
  • -38% - public building construction;
  • -27% - K-12 school construction;
  • +4% - warehouse construction; and
  • +11% - medical construction.

AGC’s CEO Stephen E. Sandherr once again called on the federal government for help, this time urging the new Congress and incoming Biden administration to enact measure to boost investments, adding that “Washington needs to backfill depleted state and local construction budgets so those new federal infrastructure investments can be more effective in boosting demand and construction employment.”

“As Washington officials pivot from providing pandemic relief to focusing on rebuilding the economy, infrastructure needs to be at the top of their agenda,” said Sandherr. “There is a real chance to come out of the pandemic with a stronger and more efficient economy if we can act now to rebuild aging and over-burdened infrastructure.”

Recent AGC Updates

Related to federal help, Sandherr released a statement at the end of the year as a positive response to the COVID-19 relief legislation that was passed in late December.

“The new coronavirus recovery measure announced today should provide some needed relief for a construction industry that is coping with project cancellations and job losses in most parts of the country,” he said.

“Most notably, the measure includes $10 billion in needed funding to help address the pandemic-induced shortfalls in state transportation revenues. This new funding should keep a number of road projects from getting canceled or delayed over the coming months. The measure also includes new funding for waterways, ports and other maritime facilities.”

In addition to the funding, the measure also reaffirmed the original Congressional intent that employers who utilized the Paycheck Protection Program loans will not be forced to pay more taxes as a result, which Sandherr also praised.

“Given that demand for many types of commercial construction projects is likely to remain soft in 2021, the administration’s plan to tax firms for their forgiven loan amount would have cost many construction jobs. Instead, the new recovery measure will preserve many of the original benefits of the Paycheck Protection Program, something our association has worked aggressively to ensure.”

   

Tagged categories: Associated General Contractors (AGC); COVID-19; Economy; Good Technical Practice; Jobs; NA; North America

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