May Industry News Roundup

This month:

• Starts and Stops.
• Homes, Sweet Homes.
• Economic Overview.
• Producer Prices for Construction.
• Trend Watch: Safety Gets Smart.

Highlights

‍Starts And Stops

There are promising signs that project starts and low unemployment in construction might be indicators of broader economic resilience. According to two separate May reports from Associated Builders and Contractors, construction backlogs are increasing and construction unemployment is down across the majority of states. This one-two punch of positive data seems to suggest that contractors are booking projects and continue to hire. 

However, there are still troubling indicators that may stop or slow progress. According to construction industry analysis firm Dodge Construction Network, total construction starts fell 4% in April, with manufacturing starts down a staggering 22%. Hiring, already a difficult prospect across the industry, may be facing additional pressure due to immigration policy changes.  

Meanwhile, talks on the debt ceiling continue as of press time, and there are some signs that ongoing negotiations are affecting Wall Street. 

‍“As the housing industry skilled labor shortage continues, access to workers remains on the list of the top impediments to returning home building to the historically normal levels of production.”
Further Reading: Immigrant Workers in the Construction Labor Force (National Association of Home Builders)

‍Homes, Sweet Homes.

Residential construction has been a weak point in an otherwise strong construction industry outlook. But according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development, new single-family home sales rose sharply in April, beating estimates. Low existing inventory, perhaps due to rises in mortgage interest rates, may be driving buyers toward new construction. According to Realtor.com, large sales gains in the Northeast and ongoing buyer incentives are driving the increases.

Economic Overview

According to the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 253,000 in April. Employment gains continue to be led by the leisure and hospitality, professional and business services and health care industries. For the second straight month, employment in the construction industry remained almost unchanged. The overall unemployment rate dipped slightly to 3.4%, with nonseasonally adjusted unemployment in the construction industry down to 4.1% in April, down from 5.6% in March 2023 and 4.6% in April 2022. Average hourly earnings for all employees on private nonfarm payrolls in April rose 16 cents to $33.36. Average hourly earnings have risen 4.4% over the last 12 months but have not kept pace with inflation, which rose 0.4% in April and 4.9% over the last 12 months.

‍Overview of Selected Materials Costs (April 2023, U.S. Bureau of Labor Statistics PPI)

*Preliminary. All indexes are subject to revision up to four months.

Trend Watch

‍Safety Gets Smart.

The construction industry is busy making advances in safety technology. And with an estimated 986 construction fatalities in the U.S. in 2021, every innovation counts. Here are three areas where construction technology is poised to make the industry safer and more efficient:

Drones: Building inspections, especially in cramped urban areas with tall structures, mean placing personnel on lifts and at an elevated fall risk. In New York City, a new bill would allow for drone technologies to perform facade inspections, greatly increasing safety and efficiency. Even outside of urban areas, drones can be used for site surveys and safety inspections. According to a whitepaper published by Columbia Southern University, aerial drone footage can also be used to create and adjust safety plans and determine emergency muster points. 

Wearables: T3 users already know the power of telematics for heavy equipment. But the smartwatch that many people already wear can be a personal telematics tool to decrease response time during an incident. For example, some Apple Watch models can be configured to automatically contact emergency services if they detect a hard fall. Construction-specific smart wearables such as smart helmets that can warn against equipment collisions, detect impacts and send alerts, and smart monitors that can detect dangerous gasses are already making their way to the construction site.  

Better Telematics: In 2021, transportation incidents — including so-called “struck-by” fatalities — accounted for over 20% of construction fatalities. The ability to limit equipment operation to specific individuals within preset areas and at safe speeds could help reduce these numbers. Fortunately, T3 already includes powerful tools to alert operators when equipment is out of bounds or operates at an unsafe speeds. And with keypad access control across EquipmentShare’s rental fleet, you can limit operation to qualified, trained personnel.