There is no question the “trifecta of pricing woes” is on everyone’s mind causing business owners and leaders to rethink, strategize, and get creative in order to maintain their profitability. Earlier this month, Construction Dive reported, “Despite a surprisingly strong U.S. January jobs report, nonresidential construction employment fell by 9,000 workers in the heavy and civil engineering sectors as an aging labor force retires or quits; according to The Associated Builders and Contractors, construction unemployment rate rose to 7.1% vs. 4% across all industries; and the third wild card: supply-chain snafus making it harder to count days to completion or shareholder profits.”
According to the article, “The Producer Price Index for construction climbed 22% last year. Eye-poppers ranged from 42% for fabricated structural metal products, 87% for iron and steel and 127% for steel mill products. Softwood lumber prices spiked almost 24% in December alone.” If the rate of inflation continues, it could choke off construction spending.
Predictions are that high material costs will begin to fall, but the lack of skilled workers will continue to create issues for the industry. Anirban Basu, chief economist for Associated Builders and Contractors in Washington, D.C., says, “The construction industry has been plagued with a lack of talent in the skilled trades for a long time, and it’s been difficult to get projects done on time and on budget, even in the best of circumstances and that was pre-pandemic.”
Based on their recent report, American Institute of Architects (AIA) shared, “Demand for design services in February grew slightly since January.” The AIA’s Architecture Billings Index (ABI) score for February was 51.3, up from a score of 51.0 in January (any score above 50 indicates an increase in billings). In their latest survey, firms indicated both project inquiries and design contracts remained positive in February. But while project inquiries increased to 62.5 from 61.9 in January, design contracts decreased to 55.2 from 56.1. (Source: DesignandBuildwithMetal)
HELP IS ON THE WAY
To provide some clarity on the issues currently plaguing the industry, METALCON has assembled a high powered panel of experts to share real solutions to the frustrations currently happening as you try to run your business and turn a fair profit. Join us for METALCON Live! NEXT Wednesday, April 6, as Alex Carrick, Chief Economist at ConstructConnect, Tony Bouquot, General Manager of the Metal Building Manufacturers Association, and Frank Stasiowski, CEO & Founder of PSMJ Resources, Inc. come together to deliver up-to-the-minute breakthrough tactics for transforming your business results in the face of current headwinds. Get up to speed on the supply chain disruption, sustainability, workforce challenges, cost-containment, and more.
When you register and join us, you will be able to participate by chatting directly with our experts the challenges you face!
Additionally, to help members of the metal construction community navigate these challenging times, DesignandBuildwithMetal’s Product Showcase contains a list of manufacturers and suppliers known as recognized leaders in their respective categories in the metal construction industry who remain committed to helping customers complete their projects on time and on budget.