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October Construction Insider: Rise in construction jobs and wages, higher builder confidence, more

October Construction Insider: Rise in construction jobs and wages, higher builder confidence, more

November 4, 2019

Construction Insider is a monthly roundup of the latest news and insights in construction.

Construction employment, wages continue to rise

US construction employment rate and wages have continually increased, with around 7,000 jobs added in September, according to the Bureau of Labor Statistics. KHL

  • Average hourly earnings reached $30.81, which was the highest rate in the last decade and was $5.93 more than what was reported in September 2009.
  • The unemployment rate in construction was also at a decade-low, summing up to only 3.2%, which was 0.3% lower than the overall national unemployment rate of 3.5%.  
  • “Contractors foresee plenty of projects to bid on, and nearly three-fourths of firms expect to add workers during the next twelve months,” said Chief Economist Ken Simonson of the Associated General Contractors of America.

Closings, layoffs ensue in US lumber mills amid China trade war

The ongoing trade war with China has caused a steep decline in US lumber exports, which has now resulted in job cutdowns and plant closures in multiple US lumber mills. CNBC

  • The 25% tariff that the Trump administration imposed on hardwood lumber exports has caused a massive cut in lumber demand from China in recent months.
  • China used to account for half of US hardwood lumber exports, which used to be $2 billion annually but has recently declined to a 12-month value of $615 million.
  • Russia and Central American countries have been taking what used to be America’s share of the lumber market, according to Northwest Hardwood CEO Nathan Jepson.
  • “The real long-term danger here is that we are losing market share that will not easily be won back,” wrote Tripp Pryor of the American Hardwood Export Council.

Builder confidence rises to a 20-month high in October

Builder confidence reached a 20-month high of 71 points in October due to low mortgage rates and solid job growth in the industry, according to NAHB/Wells Fargo Housing Market Index (HMI). NAHB

  •  Steady gains in single-family residential construction was observed in the latter half of 2019, which has improved sentiment levels among builders, said NAHB Chief Economist Robert Dietz.
  • HMI scores also increased per region based on their three-month moving averages, with Northeast and Midwest both posting a single-point raise to 60 and 58, respectively, while South and West registered a three-point raise, totaling to 73 and 78, respectively.
  • Builders, however, remain cautious as there are still instabilities regarding supply constraints and the slowing economy, said Dietz.

US implements new tariffs on heavy equipment from EU

New tariffs on select heavy-duty mobile equipment from the European Union (EU) took into effect on October 18, based on the most recent Final Product List released by the United States Trade Representative (USTR). FCP

  • An additional 25% import duties were imposed on aircraft components, clothing, and other goods from EU.
  • The Association of Equipment Manufacturers (AEM) encouraged companies who do business with EU suppliers to review the most recent USTR list.
  • The heavy equipment that AEM flagged to be part of the updated list includes hewing tools, pliers, permanent magnets, and objective lenses.

White House moves to speed up infrastructure permitting

The White House Council on Environmental Quality (CEQ) has submitted a proposal to “enhance and modernize” the federal infrastructure review and permitting process. Construction Dive

  • The CEQ tendered its formal proposal to the Office of Management and Budget in order to update the National Environmental Policy Act (NEPA) and make it more “efficient, timely, and effective.”
  • President Donald Trump earlier issued EO 13807, which asked the CEQ to find ways to shorten the environmental review process and kick-off infrastructure projects quicker.  
  • NEPA rules were issued in 1978 and have not been updated since.