Unprecedented price increases for a wide range of goods and services used in construction pushed up contractors’ costs by a devastating 26.3 percent from June 2020 to June 2021, according to an analysis by the Associated General Contractors of America of government data released today. Association officials cautioned that rising materials prices are making it difficult for many construction firms to benefit from the re-opening of the economy, undermining the sector’s ability to add new, high-paying jobs.
Construction employment declined by 7,000 between May and June as the industry still employs 238,000 fewer people than before the pandemic, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said that job losses in the nonresidential construction sector offset modest monthly gains in residential construction as many firms struggle with worker shortages, supply chain disruptions and rising materials prices.
Construction Officials Urge Federal Officials to Allow Unemployment Supplements to Expire, Take Steps to address Supply-Chain Backups and Remove Tariffs on Key Materials so Firms can Perform More Work
Houston-The Woodlands-Sugar Land and Odessa, Texas Have Worst 15-Month Construction Job Losses; Minneapolis-St. Paul-Bloomington, Minn.-Wis. and Fargo, N.D.-Minn. Top Lists of Metros with Job Gains
New York and Vermont Iowa Post Biggest Monthly Losses, While Florida and Oklahoma Top Gainers; Texas and Wyoming Have Worst Job Losses from the Pandemic, as Utah and Idaho Add the Most
Construction Association Calls on President to Immediately End Tariffs and Quotas on Steel, Aluminum, and Lumber as First Step to Easing Pressure on Construction Costs and Supply-Chain Bottlenecks
On June 9, AGC and the business community urged President Biden to remove steel and aluminum tariffs and quotas on the nation’s allies to help address significant price and availability issues for those construction materials. For instance, a widely watched index of steel prices rose 11% in April alone, setting new record highs each week. Many suppliers have warned of difficulty in securing truck or rail transportation from factories, distribution centers and ports. One steel manufacturer, for example, reported on April 28 having to wait 15 days for railcars to ship a load of steel. Recent reports speculate that the president and European Union leaders could next week announce plans to remove some steel and aluminum tariffs by Dec. 1, 2021. Members of the White House National Economic Council recently met with AGC’s Chief Economist Ken Simonson, who communicated the severity of the construction materials situation and the need to immediately remove such tariffs and quotas to help provide some relief.
Many Construction Firms Also Report Difficulty Finding Qualified Workers to Hire as Some Remain Reluctant to Return to Work amid Child Care Challenges and Elevated Unemployment Supplements
On June 1, President Biden called for an “all-of-government effort to expand contracting opportunities for underserved small businesses across the country.” Among other initiatives, the goal is to increase the share of contracts going to small, disadvantaged businesses (SDB) by 50 percent by 2026, which the administration calculates as an additional $100 billion to SDBs over the five-year period. SDBs include 8(a) participants and other small businesses that are at least 51% owned and controlled by socially or economically disadvantaged individuals or groups. The Administration is silent about the other small business subcategories such as Women-Owned Small Businesses, HUBZone Small Businesses, and Service-Disabled Veteran Owned Small Businesses. According to a recent Congressional Research Service report that analyzed federal contracts in FY2019, SBD contractors received 8.69% of all federal contracts and 10.13% of all small business eligible federal contracts.