November Wrap-Up Construction Insider: Predicted rise in construction starts, 84,000 new construction jobs, & more

November Wrap-Up Construction Insider: Predicted rise in construction starts, 84,000 new construction jobs, & more

December 1, 2020

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

US construction starts to rise 4% in 2021, report says

Dodge Data & Analytics 2021 Construction Outlook foresees a 4% increase in US construction starts in 2021, totaling $771 billion. Construction Dive

  • The predicted 4% increase will follow a significant dip in construction starts in 2020, which so far sits at $738 billion after a 14% drop due to the COVID-19 pandemic.
  • The dollar value for non-residential buildings is also predicted to increase by 3%, while non-building construction will rise by 7%, according to the Dodge report.
  • Despite the predicted improvements, the road to recovery for the construction sector is expected to be “long and fraught with potential potholes,” said Dodge chief economist Richard Branch.

84,000 construction jobs opened in October

The US construction sector introduced 84,000 new employment opportunities in October, according to a report from the Bureau of Labor Statistics. Construction Global

  • The number of new jobs in October is the highest recorded increase since June, although it is still 3.8% or 196,000 jobs lower than the job rate in February, the month before the pandemic was declared.
  • In total, the construction employment rate for October is still down by 2.6% or 196,000 jobs on a year-by-year basis.
  • While the unemployment rate remains worse in comparison to the October 2019 figures, it improved by 6.8% relative to September 2020.

Single-family construction starts improved in October

Construction starts for single-family units jumped up by 4.9% in October to a seasonally adjusted annual rate of 1,530,000, according to data from the US Census Bureau and the US Department of Housing and Urban Development. Builder Online

  • Single-family housing starts in October were recorded to be at a rate of 1,179,000, a 6.4% increase from September’s rate of 1,108,000.
  • Housing completions for single-family houses were down by 3.4% to a rate of 883,000 from September’s 914,000.
  • “The current housing market is characterized by robust demand, but not enough homes for sale,” said Odeta Kushi, deputy chief economist of insurance company First American.

Homeowners increase spending on home improvement

Homeowners spent an average of $13,138 on home improvement in 2020, which was higher than the $9,081 home improvement spending in 2019, according to the most recent “State of Home Spending” survey by HomeAdvisor. NAHB

  • The increase in spending on home improvement projects shows a shift away from expending money on travel and entertainment.
  • Another factor for the increase in home improvement spending is the rise in home buying among millennials, who are now near the median age of first-time homeowners.
  • “Millennials are not only rapidly becoming homeowners, but they are also spending more on home improvement than any other generation when they do,” said HomeAdvisor chief economist Mischa Fisher.

US, Canada respond to new softwood lumber duties

Lumber coalitions from both the US and Canada responded to the latest “Administrative Review” of the Department of Commerce regarding Canadian softwood lumber duties. HBS Dealer

  • The US Lumber Coalition agrees with the department’s report that Canadian softwood lumber is heavily subsidized and is dumped into the American market.
  • The commerce department’s review also issued a lower anti-subsidy and anti-dumping duty rate of 8.99%, which according to some Canadian lumber industry representatives is welcomed but still unwarranted.
  • “The fact that we’re still paying duties on our lumber products sold to the U.S. market is both frustrating and disappointing,” said Susan Yurkovich, president of the British Columbia Lumber Trade Council.
  • Effective enforcement against “unfairly traded Canadian lumber imports” is key to the growth of the US lumber industry, according to Jason Brochu, co-chair of US Lumber Coalition.