Construction Insider is a monthly roundup of the latest news and insights in construction.
Various construction metrics show upward trend in August
Trends for construction starts, employment, and backlogs all improved in August despite the ongoing COVID-19 pandemic, according to multiple analyses released last month. Construction Dive
- Construction starts for both non-residential buildings and non-building structures soared by 16% and 40%, respectively, based on the recently released data from Dodge Data & Analytics.
- Meanwhile, accounting firm Marcum reported that the construction industry has recovered 59% of the jobs that were lost at the onset of the COVID-19 crisis.
- Construction backlogs were also back to eight months in August per the data from the Associated Builders and Contractors (ABC).
- “The August data provided a much-needed respite from gloom and doom,” noted ABC chief economist Anirban Basu in a statement.
New study shows cautious optimism among contractors
A recent study from the US Chamber of Commerce (USCC) shows rising trends in contractor confidence, which indicate a guarded but optimistic outlook among contractors following the pandemic-induced economic downturn. USCC
- Confidence in new businesses and in revenue has slightly increased for the third quarter of 2020, according to the Q3 2020 USCC Commercial Construction Index.
- The study reports that the index for confidence in new businesses improved by 6 points from 50 to 56, while the index for revenue expectations rose by 4 from 44 to 48.
- The index for the current backlog, however, dipped by five marks from 73 to 68. This offset was big enough to topple the overall index to increase by only 1 point from the second to the third quarter of 2020.
- “Contractors’ more positive outlooks…suggest the construction industry is part of a broader economic recovery post-COVID, although industries including travel, entertainment, and hospitality continue to struggle,” said USCC Executive Vice President Neil Bradley.
Number of women in construction continues to rise – survey
The number of women working for the construction sector significantly rose in 2019, according to the data from the Current Popular Survey (CPS). Eye on Housing
- Around 1.2 million women were employed in the construction industry in 2019, tallying a 6% increase from the previous year and a 13% improvement from 2017.
- Women employment in construction held an overall share of 10.3% share in 2019. Majority of the occupations were for administrative support, management, and financial operations, according to CPS data.
- Skilled labor shortage remains an issue in construction, and Eye on Housing analysis sees adding more women in the industry as a “potential opportunity for the future.”
Builder confidence rose to an all-time high in September
Builder confidence was tallied at an all-time high of 83 points in September, based on the most recent National Home Builders Association (NAHB)/Wells Fargo Housing Market Index (HMI). NAHB
- Builder confidence in September beats August’s reading of 78 points, the second-highest value in the 35-year history of the HMI series.
- “Historic traffic numbers have builders seeing positive market conditions,” said NAHB Chairman Chuck Fowke. However, lumber prices continue to increase, which may lead to a slowdown in the market.
- Lumber prices are up by 170% since April. This surge in price adds around $16,000 to the price of a typical new single-family residential construction, according to NAHB Chief Economist Robert Dietz
Residential construction starts dipped in August
Construction starts for privately owned housing dropped by 5.1% to only 1.416 million in August, according to the most recent data from the New Residential Construction report of the Department of Commerce. HBS Dealer
- The August 2020 value for housing starts is still higher than the 1.377 million from August of last year.
- Despite the decrease in overall housing starts, single-family starts rose by 4.1% to 1.021 million in August. This improvement may be attributed to the lower interest rates and solid buyer demand, said NAHB Chief Economist Robert Dietz.
- Multi-family starts, on the other hand, fell by 22.7% in August. The permits for 5+ units are down by 8.3% on a year-to-year basis, as reported by Dietz.