Market Watch

INDUSTRY FIGHTS POTENTIAL FEDERAL GAS TAX SUSPENSION

The White House and top Democrats are considering a proposal to suspend the roughly 18.3-cents-per-gallon federal gas tax for the rest of the year, which could cut transportation revenue by more than $20 billion. The governors of Arkansas, California, Colorado, Florida, Illinois and Virginia are floating the idea of either rolling back existing gas taxes or preventing scheduled rate hikes from taking effect. Senators Mark Kelly (D-AZ) and Maggie Hassan (D-NH) introduced S. 3609, the Gas Prices Relief Act. The Biden administration has not taken a public position on the proposal. The industry is staunchly opposed to the measure, as gas tax funds are used to pay for infrastructure improvements through the Highway Trust Fund. Most federal highway and public transportation programs are funded primarily with taxes on gasoline and diesel fuel, a “user pays” system to support construction and maintenance.

forconstructionpros.com/22068610 CONSTRUCTION MATERIALS PRICES ROSE IN Q4 2021 BUT DECLINES EXPECTED IN Q1 2022

Linesight, a global construction consultancy firm, expects prices for construction commodities to decline in 2022 after hitting record highs last year. Much of the inflationary pressure on prices was due to shortages prompted by pandemic-related supply chain issues, increased global demand, labor disruptions and extreme weather. The findings are part of Linesight’s fourthquarter Commodity Report and price forecast, based on ACBM Staff interviews with 160-plus industry experts across the globe.

In 2021, prices for essential construction materials like copper, lumber, steel and cement hit record highs amid shortages. These higher costs and delays for delivery blunted construction output to $1.626 trillion compared to previous projections of $1.645 trillion. With the passage of the U.S. infrastructure bill, it is expected that total construction spending will jump to $1.701 trillion in 2022, a 4.5% increase over 2021. Linesight expects to see declines in prices in 2022.

forconstructionpros.com/22056153

WHERE 2022 US CONSTRUCTION HIRING WILL MEET THE TOUGHEST COMPETITION

For 2022, ThinkWhy’s cloudbased HR and talent acquisition benchmarking software, LaborIQ, forecasts nearly 240,000 jobs gained in the construction and extraction occupations—3.9% growth. Worker shortages could hinder job growth in all industries.

LaborIQ predicts construction, healthcare, professional and business services and trade, transportation and utilities will recover jobs lost in 2022. Competition for available labor is not letting up.

The four metros expected to add the most jobs overall in 2022— New York, Los Angeles, Chicago and Dallas-Fort Worth—are also the four largest metros by population. Their projected job gains are over 880,000— one in four jobs added nationally this year will be in these top markets.

Job gains for larger markets play an outsized role in the national recovery and economy, but job growth as a share of population can shed light on relative improvements for some smaller markets and for larger markets that show big improvements.

The top markets for job growth should expect to see 4% increases in employment over the course of 2022, adding a combined 845,000 jobs. Nationally, job growth in 2022 is expected to be just over 2%. Places like Las Vegas, Honolulu, Myrtle Beach and Orlando that saw huge drops in tourism should add more jobs as travel, especially business travel, start to pick up.

forconstructionpros. com/22056303

STUDY: OWNERS PULLING CONTRACTORS INTO DIGITAL CONSTRUCTION WORKFLOWS

A research report released Feb. 17 by Trimble and Dodge Construction Network details how project owners are now the chief drivers of digital workflows. The study report, Connected Construction, the Owner’s Perspective, focuses on owners, but because the subject matter deals in part with automation of intercompany processes, 236 general contractors and 232 trade contractors were also included. The data says owners are digitizing.

Takeaway #1 Contractors Must Adopt Digital

While in the past, contractors were leading the charge on pushing for a digital workflow with owners, the tide seems to have turned. The results show 80% of project owners in the study said they used digital workflows, not just internally, but externally with their project teams.

Takeaway #3 General Contractors are Piggy in The Middle

Trimble-Dodge Construction Network

Takeaway #2 Cause of Construction Delays and Errors Matters

One of the main benefits to owners of a digital workflow is the ability to trace errors and delays to their root cause. Contractors are actively adopting some systems like intercompany change order applications and field communication applications. The more contractors digitize their processes, the more visibility they get into the root causes of problems. The most frequent communication breakdowns owners reported were with general construction and construction managers, yet they were also the most likely to use a digital workflow with external parties, but this does not mean subcontractor or specialty trade contractors are better at digital workflows or communication than generals.

forconstructionpros.com/22068611

CONSTRUCTION BACKLOG AND CONTRACTOR CONFIDENCE BOTH SLIDE LOWER IN JANUARY

Associated Builders and Contractors (ABC) reported that its Construction Backlog Indicator declined to 8 months in January, according to an ABC member survey conducted Jan. 20 to Feb. 4. The reading is down 0.2 month from December 2021, but it is up 0.5 month from January 2021.

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels all inched lower in January. All three indices remain above the threshold of 50, indicating expectations of growth over the next six months.

View ABC’s Construction Backlog Indicator and Construction Confidence Index table for January 2022.

“Despite the omicron variant, ongoing supply chain issues, elevated energy and materials prices and rampant staffing shortages, the average nonresidential contractor remains upbeat,” says ABC Chief Economist Anirban Basu. “Perhaps the most remarkable aspect of the survey findings is the expectation that industry profit margins will expand during coming months, implying that contractors expect to pass along enough price increases to project owners to countervail the rising costs of construction service delivery.

“The last two months have indicated declining backlog, but the dips are not cause for particular concern,” Basu says. “Declining backlog indicates that some projects are postponed or canceled in response to rising costs and/or extended delivery timelines. The principal challenge for contractors remains a lack of sufficiently skilled labor, a structural issue that will not go away soon and a circumstance contractors have dealt with for years. The situation is likely to deteriorate further as federal infrastructure dollars begin affecting the economy more forcefully in the near future.”

Associated Builders and Contractors

EQUIPTER RB4000

ALLEVIATES LABOR SHORTAGE

Manual labor industries like roofing and general construction are being hit hard not only by supply shortages and inflation but also by the Great Resignation. It’s becoming more difficult for employers to find and retain qualified individuals. Capable of performing the work of two crew members, the Equipter RB4000 drivable dumpster handles the heavy lifting all day long.

The towable Equipter RB4000 lifts up to 12 feet and features a 4-foot rollback extension that provides protection for delicate landscaping features. The 4.1 cubic-yard aluminum container can hold and transport up to 4,000 pounds of debris, making it ideal for roofing tear-off, apartment gutting, and even picking up materials at local supply companies.

Initially designed for use in residential roofing, the Equipter RB4000 is also used by general contractors and fire and water restoration companies across the United States.

Jeremy Hardy, Superintendent at The Atkins Group in Illinois, states about their apartment remodeling jobs, “The Equipter’s helped us out because you don’t have to have that extra person that’s going around sweeping up and picking up trash and then hauling it down the stairs.”

Equipter works with over 200 third-party rental locations across the United States to make the Equipter RB4000 drivable dumpster available to those who need it. The company’s website features a Find A Rental tool to help point contractors to the closest location to them, which in turn gives those rental companies increased exposure.

Visit www.equipter.com to learn more about the Equipter RB4000 and more unique rental equipment.