Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
Signs of construction industry recovery
The U.S. Labor Department reports that the nation gained a solid 4.8 million jobs, and the June unemployment has now fallen to 11.1% as a result. This comes even as 1.4 million filed for unemployment benefits in the past week leaving economists wondering where the jobs market is headed. It’s all fairly confusing as the unemployment rate drops from previous weeks while more Americans continue filing for benefits.
New U.S. home sales rose a surprising 16.6 % in May across the nation, according to new statistics unveiled by the U.S. Department of Commerce. That’s an increase to 676,000 seasonally adjusted, a much better performance than economists had suggested for May.
With that, though, came a rise in new home prices of 4.9% to an average of $317,900. The big sales rebound left the May activity higher by 12.7% from that of 2019. It's a good barometer of the nation's home building market as existing home sales remain in the doldrums at their slowest pace in nearly a decade.
Seventy-three percent of contractors surveyed say they believe the construction industry will continue to experience work delays through this year. With the loss of new projects and revenue severe due to the coronavirus outbreak the U.S. Chamber of Commerce Construction Index continues to recover and support the $700 billion industry.
A third of respondents say they plan to hire more workers over the next six months, and 48% believe the workforce will remain about the same. Ninety-two percent of contractors report they have established new worker rules to better cope with social distancing and sanitation.
AGC concurs with the report saying its latest survey of contractors find many continue to experience project delays going into the late quarters of 2020 and some contractors may not recover at all.
Meanwhile Standard and Poor's Global Market Report claims construction loan delinquencies at U.S. banks climbed 23.8% to $3.67 billion during the first quarter of the year.
Infrastructure projects see continued delays
The National League of Cities reports that some 700 of its member communities plan to delay or cancel infrastructure projects after their budgets have been left with giant holes. In addition, over 1,100 municipalities surveyed say they are not making any equipment purchases in the foreseeable future. All claim they’ve been forced to allocate their budgets on PPE equipment and medically related cleaning products, all without any federal reimbursement.
In many communities nationwide seasonal programs such as summer camps have been shuttered as a result.
Labor costs are stabilizing
IHS Market and the Procurement Executives Group, PEG, are reporting that construction labor costs are stabilizing. Their index registered 49.0 in June, falling just short of the neutral mark of 50, while equipment and materials came in at 47.2, still indicating falling prices; whereas the subcontractor portion registered 53.2, signaling a rise in costs. Labor costs fell in the Midwest, Northeast and West while they dropped in the South.
Lockdowns continue to lift nationwide, and workers are returning to their jobs. IHS Market says its statistics show that construction lost a million jobs in April; half of that population returned in May, and the patterns are showing more construction activity increasing.
New system determines whether airport construction projects continue
A new adaptation of the traffic light system is being implemented to score how nationwide airport construction projects are doing. As an example, Chattanooga, Denver, New York LaGuardia, Salt Lake City, San Diego and Seattle airports are continuing with major construction efforts for green light status.
Charlotte, Dallas, Atlanta, Chicago O'Hare, Orlando and San Francisco work has been either slowed down, reduced in size or postponed to a later date receiving a yellow light. While airport projects in Austin, TX, Pittsburgh, Jacksonville and Tampa, FL, have been halted altogether generating a red light.
Each has seen huge drops in airline passenger travel due to the virus crisis, and overall were dealing with a drop in spending of some $11.6 billion in construction dollars as a result.
First post-coronavirus building to open
A new office building set to open soon in Chicago will carry with it the title of the first designed for the post COVID-19 environment. Fulton East is a 12-story, 90,000-square-foot office and retail building specifically designed for the post virus to keep an environment where hygiene, health, safety and wellness are holistically engineered.
The building will have the world's first toe to go elevator system using foot activated call buttons for a hands free experience. It will employ air fix non thermal plasma technology to provide cleaner air and work surfaces reducing viruses ,bacteria and mold by 90%. The new building located in Chicago's Fulton Market District is also designed with over 10,000-square-foot floor plates to accommodate safe social distancing.
In closing, "I must do something" will always solve more problems than "something must be done."
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.
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