AGC Analyzes Year-Over-Year Employment Numbers
A recent analysis of a survey from the Associated General Contractors of America has revealed that year-over-year from January, nearly two-thirds of the nation’s metro areas saw construction employment decrease.
These numbers were anticipated as a response to the COVID-19 pandemic, however, the AGC says that employment could continue to decline as contractors grapple with the spike in materials prices.
“More contractors are telling us they are cutting headcount than adding workers, which is consistent with the new data showing the industry is shrinking in many parts of the country,” said Ken Simonson, the AGC’s chief economist. “More than three-fourth of the firms said projects had been postponed or canceled, while only one out of five reported winning new work or an add-on to an existing project in the previous two months as a result of the pandemic. That imbalance makes further job losses likely in many metros.”
Construction employment fell in 225, or 63%, of 358 metro areas between January 2020 and January 2021. Industry employment was stagnant in 41 additional metro areas, while only 92 metro areas—26%—added construction jobs during that time period.
Other data points include:
The AGC is once again urging Congress and the Biden Administration to address the materials prices.
“The construction industry won’t be able to fully recover and start adding jobs in significant numbers as long as materials prices continue to spike, deliveries remain unreliable and demand remains uncertain,” said Stephen E. Sandherr, the ACG’s chief executive officer. “Federal officials can’t fix every problem, but they can help by removing tariffs, helping hard-hit shippers and boosting investments in the nation’s infrastructure.”
Previous Employment Numbers
Construction employment numbers in February fell by about 61,000, according to an analysis by the AGC at the beginning of the month. The AGC cited severe weather as the primary driver, as well as continued weakness in new nonresidential projects.
The slump was reportedly the first overall decline since April 2020. Other details include:
Just last week, the Concrete Foundations Association announced that it is leading the charge of an industry-wide effort to mitigate the pending shortage of steel form ties. According to the association, the shortage of the ties is not only reducing production capacity for contractors but is threatening shutdowns in residential and commercial construction.
“This shortage has evolved over the past two quarters into a significant industry issue. The record level of housing starts in 2020 has combined with significant factors such as purchasing practices, raw material depletion and tariffs on imports as well as the pandemic’s impact on both shipping and manufacturing,” said James Baty, Executive Director of the CFA.
According to CFA, aluminum handset systems account for an estimated 70% of all residential cast-in-place concrete foundations including crawl spaces and full-height living space basements.
In response, the CFA says it has developed a coalition of industry stakeholders including the National Association of Home Builders to gather information related to the situation, as well as to begin identifying possible solutions.
Baty said that some key concerns are making sure that shortcuts aren’t taken in the building process to account for the shortage, such as using fewer ties or trying alternative systems that aren’t tested for specific loads.
A data analysis last month from both the NAHB and the AGC showed price hikes for materials that are reaching record-setting levels and heavily burdening firms.
On the residential side, the NAHB says that stronger buyer demand has helped boost builder confidence and therefore offset these supply chain challenges, according to its analysis with the Wells Fargo Housing Market Index. However, the AGC says that some other sectors are facing massive hardship and the organization is calling on the Biden administration to review and rescind a range of trade tariffs.