Sources: Associated Builders & Contractors, Washington, D.C.; CP staff
An Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics indicates that the construction industry added 110,000 jobs in March, bringing to 931,000 the number gained since April 2020, or nearly 84 percent of those jobs lost during the early stages of the Covid-19 pandemic. The construction unemployment rate fell to 8.6 percent this March from 9.6 percent the prior month, but it is still 1.7 percentage points higher than a year ago.
“Here comes the tsunami of economic and employment growth across America,” says ABC Chief Economist Anirban Basu. “With more stimulus on the way, the United States may end up growing faster than China this year. Much of the stimulus to come will directly affect construction, particularly the heavy and civil engineering segment. While any infrastructure stimulus should be geared toward projects generating the highest rates of return and open to bids by all competent contractors, the sheer volume of money flowing into the economy is set to create massive forward momentum for the balance of 2021 and likely through 2022. Contractor optimism seems to reflect this building momentum, according to the latest ABC Construction Confidence Index.”
“As always, there are risks,” he adds. “The federal government is borrowing heavily to stimulate the economy. Inflationary pressures are likely to become more apparent during the months ahead, translating into rising interest rates. Already, key construction inputs such as softwood lumber and diesel fuel have experienced sharp price increases over the course of the pandemic. At some point in the future, the U.S. economy could see not only faltering stimulus, a massive national debt and higher costs of capital, but also higher taxes. That does not represent a promising recipe for contractor health. For now, however, it is all systems go.”