State of the Industry

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The Marcum Commercial Construction Index for the third quarter of 2022 reports that the construction industry remains constrained by labor shortages and elevated materials prices, but now also faces a rapidly deteriorating economic outlook and severely elevated borrowing costs. While some construction segments retain momentum, there are signs that broader economic weakness have begun to drag on the industry.

Construction companies added 20,000 employees in November and continued to raise wages for hourly workers more steeply than other sectors as the industry’s unemployment rate tumbled, according to an analysis by the Associated General Contractors of America of new government data. Association officials said the data shows that firms would have added significantly more workers if they could find more people to hire.

Total construction spending decreased by 0.3 percent for the month of October, with downturns in homebuilding and most major nonresidential categories, according to an analysis the Associated General Contractors of America released Dec. 1 of federal spending data. Association officials noted contractors are struggling to complete projects as the number of open positions at the end of October topped hires in the month.

Construction employment increased in 268, or 75 percent, of 358 metro areas between October 2021 and October 2022, according to an analysis by the Associated General Contractors of America of new government employment data. Association officials noted, however, that job vacancies outpaced hiring, as construction firms struggle to find enough qualified workers to hire.

On Nov. 22, the experts at Zonda released the New Home Market Update report for October 2022.

A measure of construction contractors’ bid prices moved sharply higher in October as firms coped with ongoing supply chain challenges and a tight labor market, according to an analysis by the Associated General Contractors of America of government data released Nov. 15. Association officials said rising construction costs threaten to undermine demand for projects and urged administration officials to remove remaining tariffs on construction materials and to boost investments in construction-focused education and training.

The construction industry added only 1,000 employees in October while it continued to boost wages for hourly workers, as firms compete to hire from a small labor pool, according to an analysis by the Associated General Contractors of America of new government data. Association officials said the small increase in construction employment is an indication of how hard it has become for construction firms to find qualified workers to hire.

Total construction spending increased by 0.2 percent for the month of September and by 10.9 percent for the year, as nonresidential construction activity now outpaces residential construction, according to an analysis the Associated General Contractors of America released on Nov. 1 of federal spending data. Association officials noted that gains in public sector transportation construction have lagged other fast-growing segments as officials grapple with Buy America and other new regulatory requirements.

On Oct. 27, the Equipment Leasing & Finance Foundation released the Q4 update to its 2022 Equipment Leasing & Finance U.S. Economic Outlook, forecasting 5.9 percent growth in equipment and software investment and 1.8 percent growth in GDP this year.

On Oct. 24, the experts at Zonda, the housing industry's foremost advisors, released the New Home Market Update report for September 2022. The housing market has entered a wait-and-see phase—consumers are trying to decide if it makes sense to buy today or wait.