Construction employment declined for the third time in the past four months in May as nonresidential contractors coped with lengthening and unpredictable delivery times that limited their ability to start or complete projects, according to an analysis by the Associated General Contractors of America of government data released today. Association officials added that many contractors report they are having a hard time finding qualified workers to hire as some people remain reluctant to return to work while their children are learning from home, or they are collecting elevated unemployment supplements.
“Steadily worsening production and delivery delays have exceeded even the record cost increases for numerous materials as the biggest headache for many nonresidential contractors,” said Ken Simonson, the association’s chief economist. “If they can’t get the materials, they can’t put employees to work.”
Seasonally adjusted construction employment in May totaled 7,423,000, a drop of 20,000 from the downwardly revised April total. Industry employment declined as well in April and February. The total in May remained 225,000 less than in February 2020, the high point before the pandemic drove construction employment down by more than a million jobs.
The gap widened in May between residential construction, which has experienced feverish demand for new and remodeled housing, and nonresidential construction, which has been declining, aside from a few niches. Residential construction firms—contractors working on new housing, additions, and remodeling—gained 1,900 employees during the month and employed 35,000 more workers (1.2%) in May than in the pre-pandemic peak month of February 2020. In contrast, the nonresidential sector—comprising nonresidential building, specialty trades, and heavy and civil engineering contractors—shed 21,800 jobs in May and employed 260,000 fewer workers or 5.6% less than in February 2020.
“Contractors are being told they must wait nearly a year to receive shipments of steel and 4-6 months for roofing materials,” Simonson noted. “These delays make it impossible to start some projects and to complete others, leaving contractors unable to keep workers employed. In addition, soaring prices for steel, lumber, and other materials are deterring owners from committing to going ahead with projects.”
Association officials urged Congress and the Biden administration to take steps to address the record materials price increases and supply chain bottlenecks. They said the President should end tariffs on key materials like lumber, steel, and aluminum. They added that Washington officials should look at ways to ease manufacturing and shipping backups. And they urged Congress to allow unemployment supplements to expire, as planned, after Labor Day.
“The decline in construction employment is likely less about a lack of demand as it is about the challenges contractors are facing in meeting that demand,” said Stephen E. Sandherr, the association’s chief executive officer. “Supply-chain problems and labor shortages are holding back what should otherwise be a much stronger recovery for the construction sector.”
Related Stories
Market Data | Feb 23, 2021
Architectural billings continue to contract in 2021
AIA’s Architecture Billings Index (ABI) score for January was 44.9 compared to 42.3 in December.
Healthcare Facilities | Feb 18, 2021
The Weekly show, Feb 18, 2021: What patients want from healthcare facilities, and Post-COVID retail trends
This week on The Weekly show, BD+C editors speak with AEC industry leaders from JLL and Landini Associates about what patients want from healthcare facilities, based on JLL's recent survey of 4,015 patients, and making online sales work for a retail sector recovery.
Market Data | Feb 17, 2021
Soaring prices and delivery delays for lumber and steel squeeze finances for construction firms already hit by pandemic
Association officials call for removing tariffs on key materials to provide immediate relief for hard-hit contractors and exploring ways to expand long-term capacity for steel, lumber and other materials,
Market Data | Feb 9, 2021
Construction Backlog and contractor optimism rise to start 2021, according to ABC member survey
Despite the monthly uptick, backlog is 0.9 months lower than in January 2020.
Market Data | Feb 9, 2021
USGBC top 10 states for LEED in 2020
The Top 10 States for LEED green building is based on gross square feet of certified space per person using 2010 U.S. Census data and includes commercial and institutional projects certified in 2020.
Market Data | Feb 8, 2021
Construction employment stalls in January with unemployment rate of 9.4%
New measures threaten to undermine recovery.
Market Data | Feb 4, 2021
Construction employment declined in 2020 in majority of metro areas
Houston-The Woodlands-Sugar Land and Brockton-Bridgewater-Easton, Mass. have worst 2020 losses, while Indianapolis-Carmel-Anderson, Ind. and Walla Walla, Wash. register largest gains in industry jobs.
Market Data | Feb 3, 2021
Construction spending diverges in December with slump in private nonresidential sector, mixed public work, and boom in homebuilding
Demand for nonresidential construction and public works will decline amid ongoing pandemic concerns.
Market Data | Feb 1, 2021
The New York City market is back on top and leads the U.S. hotel construction pipeline
New York City has the greatest number of projects under construction with 108 projects/19,439 rooms.
Market Data | Jan 29, 2021
Multifamily housing construction outlook soars in late 2020
Exceeds pre-COVID levels, reaching highest mark since 1st quarter 2018.