An Industry of Issues
No other AHR Expo I've attended over 17 years has had as many major issues weighing on the minds of industry leaders and their various association constituents as the one about to begin on Jan. 31. AHR has put together a Trend Report that offers up those issues and industry leaders’ opinions, hopes and predictions for
Here is a link to the entire Trend Report.
I was especially glad to see they solicited the opinion of Rob “Doc” Falke, president of National Comfort Institute, whose members specialize in the much-needed art and science of Home Performance Contracting. Rob pens two columns for us every month, and we value his technical expertise.
Construction Conundrum
The ripple effects from the pandemic continue to reach the US construction industry, a sector estimated by Statista to reach $1.15 trillion in 2022.
Because even though jobs are being added at a slow pace, and the industry has recovered 92% (more than one million) of jobs lost to the pandemic, according to Associated Builders and Contractors -- unemployment in the construction industry continues to rise. And at this writing on January 7, the US workforce grew by only 199,000 in December.
“Today’s jobs report has economists shaking their heads,” said ABC Chief Economist Anirban Basu. “Not because it was an especially terrible report, but because the data are so difficult to interpret. The headline number of 199,000 jobs added economywide is deeply disappointing and makes December the fourth month in five that the headline number has fallen short of expectations.
But on closer analysis, Basu said, our construction labor market is improving.
“Economywide unemployment dipped to 3.9% as the labor force participation rate remained unchanged. While it is true that the construction industry rate of unemployment ticked higher, this is likely because of seasonal factors as opposed to a rush of Americans joining the construction workforce.”
But rather than analyze the numbers to death, Basu urges contractors to understand how tight the labor market is as 2022 begins, and what they might need to pay workers.
“Contractors will be competing fiercely for talent. They already have been, according to ABC’s Construction Confidence Indicator. But that competition will become even more intense as dollars from the infrastructure package flow into the economy. Accordingly, contractors should expect another year of rapid wage increases in 2022. Those rising costs, along with others, must be included in bids if margins are to be sustained.”
Average hourly earnings in construction rose from $33.45 in November 2021 to $33.57 in December 2021. Average weekly hours worked in November 2021 were 39; in December 2021, 39.3.
Construction employment numbers from November 2021 and December 2021 as reported by ABC are amazingly close: