According to ABC, Monthly Construction Input Prices Rise in June

Construction input prices rose 2.2% in June, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices rose by 2.3% for the month.

Among the 11 subcategories, six experienced monthly increases. The increase in prices was driven primarily by energy, with the largest increase coming from crude petroleum, which rose 71.9%. Unprocessed energy materials rose 16.8%, while the price of natural gas fell 18.4%. Softwood lumber experienced an 11.0% increase in June.

“For many contractors, lack of demand for their services has emerged as the leading source of concern due to the COVID-19 pandemic, followed closely behind by a fear of inflation and a potential increase in materials prices,” said ABC Chief Economist Anirban Basu. “June’s PPI data indicate that they are right to be concerned.”

“With global supply chains buckling and trade tensions elevated, materials prices are more likely to ratchet higher, even in the context of a global economy that will shrink markedly this year,” said Basu. “While the recent rise in energy prices receives much of the attention, the price of softwood lumber is up nearly 19% over the past 12 months and was up 11% in June itself.

“Inflation is not problematic at the moment, but that could change over the next year or two,” said Basu. “Central banks around the world have been increasing money supply, which could ultimately trigger faster price increases as economic activity firms. The combination of weak demand for construction services and rising input prices would be potentially devasting for nonresidential contractor profit margins, which remain an area of concern according to ABC’s most recent Construction Confidence Index. It would also be bad for the broader economy, which has benefited from the nonresidential construction sector’s relative stability in recent months.”    

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, GDP and the Producer Price Index.

Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org  

AEM Applauds Legislation to Strengthen Manufacturing in AmericaAEM Applauds Legislation to Strengthen Manufacturing in America

Association of Equipment Manufacturers (AEM) president Dennis Slater today issued the following statement supporting introduction of legislation to strengthen manufacturing by U.S. Senator Gary Peters of Michigan:

“The Association of Equipment Manufacturers commends the introduction of the National Institute of Manufacturing Act to strengthen the manufacturing sector and ensure the future competitiveness of U.S. manufacturing in the global economy,” said Dennis Slater, president of AEM. “Equipment manufacturers represent twelve percent of the entire U.S. manufacturing sector and supports 2.8 million family-sustaining jobs across the country. We need a comprehensive, coordinated, and competent national effort in support of the manufacturing sector and its workforce. This legislation will reduce redundancies and improve efficiencies across existing federal manufacturing programs and ensure that the federal government is better positioned to respond to rapid changes in the global manufacturing landscape. Senator Gary Peters knows firsthand the challenges and opportunities facing equipment manufacturers, and he has been a steadfast advocate for the industry in the United State Senate. We applaud the Senator for his vision and leadership to ensure the federal government is better positioned to support the industry and urge all Democrat and Republican Senators to support this important legislation.”

“With a long and rich history of manufacturing hundreds of world class products in Winn, Michigan, we know first-hand the critical role that manufacturing plays as the engine that drives the economy by creating jobs, opportunity, and prosperity for Americans,” said John Foote, senior vice president at Morbark. “This has been especially true in our rural central Michigan area. We also recognize the need for a more far-reaching and strategic approach to ensure that the manufacturing sector and its workforce receives the resources and leadership they need to continue to innovate and manufacture in Michigan and across the United States. We would like to thank Senator Gary Peters for his steadfast leadership to strengthen the sector and ensure the future competitiveness of U.S. manufacturing in the global economy. Senator Peters has personally met with us in the past, listened to our needs and responded proactively. We hope that his colleagues in the United States Senate will support his legislation and work in a bipartisan and collaborative fashion to make America the best country in the world to manufacture.”

AEM was the first trade association to call for a comprehensive national strategy for manufacturing “to develop and implement a comprehensive national strategy for manufacturing to strengthen the economy, create new jobs and opportunities, and ensure the U.S. is the best place in the world for equipment manufacturers to innovate, manufacture, and do business.” Currently, there are 58 manufacturing-related programs across nearly a dozen federal agencies, making it unnecessarily difficult and expensive to carry out missions and impossible to estimate total federal investment in manufacturing. AEM believes a coordinated national effort would significantly increase efficiencies and collaboration across existing federal manufacturing programs, reduce wasteful spending and improve the ability and accountability of the federal government to respond to rapid changes in the global manufacturing landscape.

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AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry in the United States supports 2.8 million jobs and contributes roughly $288 billion to the economy every year.

The veins, arteries and capillaries that pump life into our nation — 8.000,000,000 miles of our, Roads and Highways

8-million-miles-of-highways-and-roads-photo-u1
from Maps of the US 

I was sent the above map by a friend and thought it was very appropriate since we now have a new House Transportation Bill in the works waiting for Senate review.

Thanks for the map Jeff.

ABC: Nonresidential Construction Has Recovered 56% of Jobs Lost Since March Employment Report

July 2—The construction industry added 158,000 jobs on net in June, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. During the last two months, the industry has added 591,000 jobs, recovering 56% of the industrywide jobs lost since the start of the pandemic.

Nonresidential construction employment added 74,700 jobs on net in June. There was positive job growth in two of the three nonresidential segments, with the largest increase in nonresidential specialty trade contractors, which added 71,300 jobs. Employment in the nonresidential building segment increased by 13,100 jobs, while heavy and civil engineering lost 9,700 jobs.

The construction unemployment rate was 10.1% in June, up 6.1 percentage points from the same time last year but down from 12.7% in May and 16.6% in April. Unemployment across all industries dropped from 13.3% in May to 11.1% in June.

“Since the pandemic devastated the economy, most economists have been predicting a V-shaped recovery,” said ABC Chief Economist Anirban Basu. “To date, this has proven correct. While recovery is likely to become more erratic during the months ahead due to a number of factors, including the reemergence of rapid COVID-19 spread, recent employment, unemployment, residential building permits and retail sales data all highlight the potential of the U.S. economy to experience a rapid rebound in economic activity as 2021 approaches. ABC’s Construction Backlog Indicator rose to 7.9 months in May, an increase of less than 0.1 months from April’s reading, and its Construction Confidence Indicator continued to rebound from the historically low levels observed in the March survey.

“However, even if the broader U.S. economy continues to rebound in 2020, construction is less likely to experience a smooth recovery,” said Basu. “The recession, while brief, wreaked havoc on the economic fundamentals of a number of key segments of the construction market, including office, retail and hotel construction. Moreover, state and local government finances have become increasingly fragile, putting both operational and capital spending at risk.

“After this initial period of recovery in U.S. nonresidential construction, there are likely to be periods of slower growth or even contraction,” said Basu. “Nonresidential construction activity tends to lag the broader economy by 12-18 months, and this suggests that there will be some shaky industry performance in 2021 and perhaps beyond.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, GDP and the Producer Price Index.

Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org  

ARTBA Issues Statement on House Passage of Infrastructure Bill

American Road & Transportation Builders Association (ARTBA) President & CEO Dave Bauer issued the following statement about House passage of the Moving Forward Act:
 
“The nation’s economic recovery post-coronavirus would receive a huge long-term boost with the passage of a robust surface transportation investment bill.
 
“We commend the House for taking a positive step in that direction with its July 1 approval of The Moving Forward Act.
 
“The last thing states need during tumultuous times is more uncertainty about their share of federal highway and public transit funding.  Short-term program extensions are not the solution and would only add insult to injury.
 
“We urge the Senate to move forward quickly on its version of a multi-year reauthorization bill.  Final bicameral action is imperative before the current FAST Act law expires Sept. 30.”
 
 
The American Road & Transportation Builders Association (ARTBA) brings together all facets of the transportation construction industry to responsibly advocate for infrastructure investment and policy that meet the nation’s need for safe and efficient travel.  ARTBA also offers value-added programs and services providing its members with a competitive edge.

For more information visit: www.artba.org