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January Wrap-Up Construction Insider: Projected construction boost, Buy American program & more

January Wrap-Up Construction Insider: Projected construction boost, Buy American program & more

February 3, 2021

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

Construction sector expects boost under Biden admin

The US construction industry is projected to grow by a yearly average rate of 1.4 percent between 2021 and 2024 following the inauguration of US President Joe Biden, according to a GlobalPort report. Construction Global

  • Biden’s proposal to allocate $2 trillion for infrastructure and clean energy projects is among the many policies that are seen to have major implications in the US economy.
  • The housing demand is expected to increase due to record-low mortgage rates and the shift in remote working across most industries.
  • The vaccine rollout and the release of additional relief packages are also seen to bring short-term economic growth.

US home construction rose 5.8% in December

Residential construction in the US increased by 5.8% to a 14-year high of 1.67 million units in December, according to the Commerce Department. ABC News

  • The rising trend in home construction began in November, when a seasonally adjusted rate of 1.58 million units was recorded.
  • Housing has performed relatively well despite the coronavirus pandemic as mortgage rates decreased and Americans moved to houses with bigger home offices.
  • “We expect the pace of housing starts to moderate in 2021 as homebuilders confront constraints including high lumber prices,” said Oxford economist Nancy Vanden Houten.

Biden signs order to strengthen Buy American Program

President Joe Biden has issued an executive order that seeks to rework and strengthen Buy American policies in the US. ENR

  • The newly issued directive will impose Buy American-type requirements that center on promoting domestic preference for various products, including construction materials.
  • The directive, which was signed on January 25, includes a provision that updates how a product’s domestic content is determined.
  • Biden also revoked an earlier provision ordered by former president Donald Trump concerning the Buy American-Hire American policy.

Construction costs increased in December

Construction input costs rose by 1.8% in December from the previous month’s rates, according to Associated Builders and Contractors. HBSDealer

  • The largest monthly price increase was the 17.5% rise for crude petroleum products. The price for softwood lumber jumped too by 12.2% in December.
  • The increase in softwood lumber prices was driven by the boom in single-family housing construction and the limited product supply, said ABC Chief Economist Anirban Basu.
  • Meanwhile, the price for natural gas dipped by 9.4%, registering the largest decrease among construction input materials.

OSHA raises penalty amounts

The Occupational Health and Safety Administration increased its civil penalty amounts for 2021, effective January 16. Construction Dive

  • The new maximum federal penalty for serious and other-than-serious violations is $13,653 per infringement.
  • The new maximum penalty for repeated violations is $136,532 per violation. It was previously $134,937.
  • The penalty maximums were increased to reflect the rate of inflation.