WASHINGTON, Oct. 2—National nonresidential construction spending increased 0.4% in August, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.09 trillion.

Spending was up on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending increased by 0.3%, while public nonresidential construction spending was up 0.6% in August.

“Aggregate nonresidential construction spending expanded at a respectable rate in August,” said ABC Chief Economist Anirban Basu. “But manufacturing-related and public sector projects accounted for more than 100% of the monthly increase. Privately financed commercial- and educational-related construction spending declined by almost 1% at least partially due to elevated borrowing costs.

“Despite high interest rates and ongoing weakness in certain segments like office and retail, contractors remain relatively upbeat,” said Basu. “Despite still-high materials costs and ongoing labor shortages, a plurality of contractors expect their profit margins to increase over the next six months, according to ABC’s Construction Confidence Index.”

WASHINGTON, Sept. 18—Associated Builders and Contractors today announced the members of its 2023-2024 Tech Alliance—a consortium of firms that create construction technology and innovative solutions for ABC contractor members, which primarily perform work in the commercial and industrial sectors.  

“The members of ABC’s fourth Tech Alliance cohort are leaders in the construction innovation space and help us help our members become safer, more profitable and equipped to win more work,” said Matt Abeles, ABC vice president of construction technology and innovation. “These companies have been a foundational group of partners to ABC, providing technology and innovation education to our members nationwide through dozens of tech events across our 68 chapters. We can see the increased tech utilization among our ABC contractors as a result.”

Comprised of 15 companies, the Tech Alliance leverages technology resources to help ABC members develop people, win work and deliver work safely, ethically and profitably for the betterment of the communities in which they work.

The 2023-2024 Tech Alliance members are industry leaders Arcoro, Autodesk Inc., BuildOps, ConstructConnect, Egnyte, Field Control Analytics, Kojo, KPA, Procore, Sage, Smartapp, SmartBuild, SubHQ, Tenna and Trimble.

The Tech Alliance introduces small and midsized contractors and subcontractors to construction technology solutions for bidding, billing, building information modeling, compliance, connected equipment, customer relationship management, supply chain management, field collaboration, job costing, jobsite monitoring, preconstruction, project management, safety analytics, security, service software, subcontractor management and time tracking, among others. Tech Alliance companies also collaborate on resources for ABC members, including beta testing, free technology programs and educational webinars, and provide ABC’s 68 chapters with access to technology products used in the field by ABC contractor members.

In addition to the Tech Alliance, ABC’s Tech Marketplace offers premier discounts for construction technology and innovative digital solutions to ABC members. The Tech Marketplace is comprised of over 20 vetted companies that help ABC contractor members advance and grow their technology strategies, offerings and abilities.

To learn more, visit abc.org/techalliance and abc.org/techmarketplace.

WASHINGTON, Sept. 14—Construction input prices rose 1.5% in August compared to the previous month, 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 also increased 1.5% for the month, but are up just 0.2% from a year ago.

Rising energy prices drove overall price increases in August. Crude petroleum prices were up 8.9% and unprocessed energy materials prices rose 5.4% last month. 

“Anyone who thought that excess inflation would simply go away later this year has been rudely awakened this week,” said ABC Chief Economist Anirban Basu. “Yesterday’s consumer price data and today’s PPI release indicate that price growth continues to be problematic. While energy prices will grab headlines, items like concrete and switchgear also exhibited inflationary tendencies in August.

“There are many implications for construction contractors, including the fact that persistently elevated inflation will keep interest rates higher for longer,” said Basu. “ABC has been predicting this for months. With labor costs still rising, consumers spending aggressively, oil-producing nations limiting output and global supply chains being reorganized, there is reason to believe that future readings will also demonstrate excess inflation is here to stay.”

WASHINGTON, Sept. 12—Associated Builders and Contractors reported today that its Construction Backlog Indicator declined to 9.2 months in August, down 0.1 month, according to an ABC member survey conducted from Aug. 21 to Sept. 6. The reading is 0.5 months above the August 2022 level.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog decreased on a monthly basis for all categories of company size except for those with more than $100 million in annual revenues, while only the smallest two revenue categories have higher backlog than in August 2022.

ABC’s Construction Confidence Index reading for sales, profit margins and staffing levels moved higher in August. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“There’s no sign of a construction recession in the near term,” said ABC Chief Economist Anirban Basu. “If anything, contractors are more upbeat, as policy and technology shifts along with economic transformation, are creating substantial demand for improvements and growth in America’s built environment.

“While a plurality of contractors expects only small improvements in sales, profit margins and staffing over the next six months, even incremental improvement is remarkable in the context of tightening credit, higher project financing costs and lingering fears of recession,” said Basu. “Backlog continues to be at the upper end of historic levels, with the infrastructure category registering substantial gains in backlog in August. That suggests that a growing number of public works projects is poised to break ground.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

WASHINGTON, Sept. 1—National nonresidential construction spending grew 0.1% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.08 trillion and is up 16.5% year over year.  

Spending was up on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending increased 0.5%, while public nonresidential construction spending was down 0.4% in July.

“After today’s jobs report, which indicated that nonresidential construction added an outsized number of jobs in August, one would have expected a strong construction spending growth number as well,” said ABC Chief Economist Anirban Basu. “Alas, the economic data, just like the economy, continue to be full of surprises. In July, nonresidential construction spending barely expanded. Once one adjusts for inflation, spending declined in real terms.

“Perhaps the bigger surprise is that construction spending weakness was not concentrated in the private developer-driven segments that have struggled to establish consistent momentum, but in a number of public construction segments,” said Basu. “Monthly spending was down in the highway/street, transportation, sewage/waste disposal and conservation/development categories. However, each of these categories has experienced year-over-year spending growth.

“Since nonresidential construction hiring was strong last month, the expectation is that July’s construction spending number will prove to be an aberration,” said Basu. “Spending growth should be solid going forward, driven in large measure by several massive construction projects in development or early construction stages. That said, those segments that depend most on bank financing are poised to weaken going forward.”

WASHINGTON, Sept. 1—The construction industry added 22,000 jobs on net in August, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 212,000 jobs, or 2.7%. 

The lion’s share of job creation was among nonresidential contractors. Nonresidential construction employment increased by 21,000 positions on net, with growth registered in all three major subcategories. Nonresidential specialty trade added 12,100 positions, while heavy and civil engineering and nonresidential building added 7,100 and 1,800 jobs, respectively.

The construction unemployment rate remained unchanged at 3.9% in August. Unemployment across all industries expanded from 3.5% in July to 3.8% last month.

“This is the era of the megaproject,” said ABC Chief Economist Anirban Basu. “While many private developers are encountering harsher lending markets and suffering greater difficulty financing projects, the transformation of American manufacturing, combined with accelerating infrastructure spending, has dramatically increased demand for construction workers. Many of these projects exceed $1 billion. This is especially true in certain parts of the nation, including Ohio, Texas and Arizona.

“Given the outsized role of megaprojects in the current economic environment, it is conceivable that the construction industry will face recessionary conditions in certain areas of the country sometime during the next two years, even as activity surges in others,” said Basu. “This suggests that many construction workers may decide to relocate as the disparity in industry performance widens both geographically and among various industry segments.”

WASHINGTON, Aug. 29—Associated Builders and Contractors today issued the following statement opposing the U.S. Department of Labor‘s proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act. The proposal increases the minimum salary level threshold to $55,068 annually for a full-year worker and automatically updates the threshold every three years.

“ABC is disappointed that the DOL is moving forward with a proposed overtime rule since multiple industries, like construction, are still grappling with the lingering economic consequences of inflation, global supply chain disruptions, rising materials prices and workforce shortages, all of which push operational costs ever higher,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.

“It is unfortunate that the DOL did not listen to our repeated requests to abandon or postpone issuance of the proposed overtime rule until the current economic situation stabilizes or improves, allowing employees and employers to fully navigate the paradigm shift of work in America without new unnecessary and costly red tape,” said Brubeck.

Background:

On May 25, 2023, ABC, as a steering committee member of the Partnership to Protect Workplace Opportunity, as well as 103 other organizations, sent a letter to Acting Secretary of Labor Julie Su, urging her to abandon or at least postpone issuing the DOL’s proposed rulemaking that would alter the overtime regulations under the FLSA. Further, the letter stated that the DOL’s last update to the overtime regulations went into effect in 2020—just three years ago, which strongly suggests there is no need for urgency in issuing more changes.

In Spring 2022, ABC and the employer community participated in DOL listening sessions warning that any rule change is ill-advised.

In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. ABC, along with several other business groups, sued the DOL in federal court and succeeded in blocking the rule from taking effect.

In 2019, the Trump administration issued a new overtime rule, which formally rescinded the 2016 rule and readjusted the minimum salary level for exemption to $35,568 per year. The final rule went into effect on Jan. 1, 2020.

WASHINGTON, Aug. 29—Associated Builders and Contractors issued a statement from Vice President of Regulatory, Labor and State Affairs Ben Brubeck on the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers’ Aug. 29 final rule further revising the definition of “waters of the United States.”

“Unfortunately, these revisions fail to fully implement the U.S. Supreme Court’s ruling in Sackett v. Environmental Protection Agency, which placed clear boundaries on the scope of the federal government’s authority while maintaining reasonable environmental protections for America’s waterways.

“Instead, this rule, issued without meaningful opportunities for input from the construction industry and other stakeholders, will contribute to continued regulatory uncertainty and unnecessary delays for critical infrastructure projects across the nation. ABC urges the Biden administration to issue broader revisions to WOTUS in full compliance with the Supreme Court’s decision.”

WASHINGTON, Aug. 29—The U.S. Treasury Department’s Internal Revenue Service today released a proposed rule and FAQs on provisions of the ABC-opposed Inflation Reduction Act, which will affect the developers, contractors and workers that are building clean energy projects eligible for more than $270 billion in federal tax credits.

The Treasury’s Notice of Proposed Rulemaking, Increased Credit or Deduction Amounts for Satisfying Certain Prevailing Wage and Apprenticeship Requirements, proposes regulations clarifying the applicability of tax credits for the construction of private clean energy projects funded by the IRA––including solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and more––conditioned on compliance with controversial prevailing wage and government-registered apprenticeship requirements. Effective Jan. 30, 2023, project developers who satisfy these regulations are eligible for a 500% increase in tax credits compared to baseline tax credits offered to developers under previous regulations.

“As is typical in the federal government’s ‘ready, fire, aim’ approach to issuing regulations, the initial IRS guidance and FAQs on the IRA’s prevailing wage and apprenticeship requirements left many unanswered questions and created confusion that has needlessly stalled the groundbreaking of clean energy projects this year,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This NPRM is a key step, welcomed by developers, taxpayers, contractors and subcontractors, who for months have been asking for clear and specific guidance on how these new provisions will be implemented. Developers can then decide whether the tax credits are worth the new and significant risks and penalties, and large and small-business contractors and subcontractors can decide whether to bid on and perform such work.”

“ABC is pleased the Biden administration recognized our legitimate concerns and directed the Treasury to conduct a formal rulemaking, which they should have started prior to the policy going into effect on Jan. 30, 2023,” said Brubeck. “Unfortunately, we are months away from a final rule and the industry is unlikely to receive the clarity and confidence it needs to fully leverage the tax credits to break ground on clean energy construction projects until then.

“ABC is still conducting a thorough review of the NPRM’s 129 pages, but, at first impression, the rule could benefit from additional improvements,” said Brubeck. “For example, in 2024 the IRA requires that 15% of all construction labor hours on a qualifying project must be performed by apprentices enrolled in government-registered apprenticeship programs. ABC expects that, in some markets, many apprenticeship programs in certain trades will not be able to meet industry demand and developers are counting on regulatory clarity for the proposal’s good-faith exception policy to assess the financial feasibility of the tax credits.

“In addition, the proposal appears to needlessly incentivize the use of anti-competitive and inflationary union-favoring project labor agreements by exempting developers from willful penalties for noncompliance with potentially confusing and half-baked rules,” said Brubeck. “To be clear, developers are not required to mandate the use of PLAs in order to receive enhanced tax credits.”

“ABC plans to address these concerns and other deficiencies in the NPRM in our formal comments to the IRS/Treasury by the Oct. 30 deadline,” said Brubeck. "We plan to encourage ABC members to participate in this rulemaking, connect them with more than 300 government-registered apprenticeship programs offered by ABC chapters, help them win IRA-funded construction contracts and build projects for clean energy developers safely, on time and on budget.”

“The bottom line is that this Biden administration policy and related regulatory delay and uncertainty are the result of yet another attempt by President Biden to ensure more taxpayer-funded construction contracts are won by unionized contractors and performed by union labor, even though less than 12% of the U.S. construction industry is unionized. This politically motivated policy will inflate the cost of clean energy projects, reduce competition from small businesses and artificially exacerbate the construction industry’s skilled labor shortage of more than 500,000 people in 2023,” said Brubeck. “The Biden administration’s favoritism toward unions through this misguided policy will ultimately undermine taxpayer investments made in clean energy construction projects.”

Background

ABC submitted comments on Nov. 4, 2022, to the Treasury in response to its request for comments on future initial guidance implementing these tax credits. ABC outlined concerns with the IRA’s unprecedented expansion of inflationary prevailing wage and apprenticeship requirements and the lack of clear guidance from Treasury as a result of it failing to issue regulations through a traditional notice-and-comment rulemaking.

ABC issued a Nov. 29, 2022, statement on the IRS/Treasury’s inadequate initial guidance.

Following extensive feedback from ABC and industry stakeholders on the November 2022 guidance, this summer the Biden administration announced a formal rulemaking on the matter.

ABC is encouraging members to participate in the Treasury’s 60-day comment period, which closes on Oct. 30.

Stakeholders can review ABC and government resources on the IRA tax credits for clean energy projects at abc.org/ira.

Of note, on Aug. 8, 2022, the Biden administration’s U.S. Department of Labor released an ABC-opposed final rule making radical changes to prevailing wage regulations implementing the Davis-Bacon Act. On July 31, 2023, the DOL’s Office of Apprenticeship sent a proposed rule, National Apprenticeship System Enhancements, to the White House Office of Management and Budget’s Office of Information and Regulatory Affairs for review, which is expected to be issued this fall.

It is unclear how the Treasury final rule will reflect the DOL’s significant changes to prevailing wage and apprenticeship regulations, which are likely to disrupt construction industry regulatory compliance, risk management, compensation and workforce development practices.

WASHINGTON, Aug. 29—The construction industry had 363,000 job openings on the last day of July, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 23,000 from June but are up by 10,000 from the same time last year.

“The demand for labor is beginning to slow,” said ABC Chief Economist Anirban Basu. “Across all industries, job openings are now at the lowest level since March 2021 and the rate at which workers are quitting their jobs has returned to the pre-pandemic norm. As consumer spending buckles under the weight of inflation and the effects of higher interest rates begin to weaken growth, the labor market should continue to cool.

“Unfortunately, the demand for construction workers remains elevated relative to supply,” said Basu. “While the number of open, unfilled construction jobs declined in July, 4.4% of industrywide positions are currently unfilled, a greater share than one year ago and at the start of the pandemic. As a result, contractors remain reluctant to lay off workers. With a majority of contractors expecting to increase their staffing levels over the next six months, according to ABC’s Construction Confidence Index, labor scarcity should remain a headwind through the end of 2023.”

WASHINGTON, Aug. 29—Associated Builders and Contractors today announced its opposition to the U.S. Department of Labor’s Occupational Safety and Health Administration announcement of a proposed rule, Worker Walkaround Representative Designation Process. The proposed rule would allow an employee to choose a third-party representative, such as an outside union representative, to accompany an OSHA inspector into nonunion facilities.

“ABC is deeply disappointed that the Biden administration is trying to revive a failed Obama-era initiative, which was bad policy then and is bad policy now,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This proposal does nothing to promote workplace safety and it will have a substantial negative impact on the rights of employers and their employees.”

“By allowing outside union representatives access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law,” said Brubeck. “Unfortunately, many outside union organizer representatives have a biased agenda that is not focused on safety or health, which could distract OSHA inspectors from their primary purpose of workplace safety.

“OSHA can have a bigger impact on jobsite safety by fostering positive partnerships with employers and promoting safety practices that produce results," said Brubeck. "For example, in ABC’s 2023 Safety Performance Report, top-performing STEP participants achieved a 688% improvement in safety performance compared to the U.S. Bureau of Labor Statistics construction industry average in 2022.”

ABC continues to review the proposed rule and assess options for a legal challenge.

On Feb. 21, 2013, OSHA issued a letter of interpretation endorsing union representatives and other nonemployee third parties accompanying OSHA inspectors on walkaround inspections at nonunion workplaces, which ABC adamantly opposed, expressing serious concerns. OSHA eventually rescinded the letter of interpretation on April 25, 2017.  

WASHINGTON, Aug. 15—Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 9.3 months in July, according to an ABC member survey conducted July 20 to Aug. 4. The reading is up by 0.6 months since July 2022.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

The South remains the region with the highest level of backlog, despite being the only region with lower backlog on a year-ago basis. Backlog gains in July were concentrated in the commercial and institutional category.

ABC’s Construction Confidence Index reading for profit margins and staffing levels moved higher in July, while the reading for sales fell slightly. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“Nonresidential construction backlog continues to expand, which is precisely what contractors had predicted six months ago," said ABC Chief Economist Anirban Basu. "For many months, contractors have been signaling an expectation that demand for their services would continue to expand despite high and rising interest rates and a spate of regional bank failures.

“That said, there are some surprises in the data,” said Basu. “Backlog declined in both the infrastructure and heavy industry categories, possibly because the current administration is striving to reserve many large-scale projects for unionized firms. ABC members are largely nonunion, and therefore may be locked out of a meaningful proportion of significant opportunities. Diminished competition for such projects would tend to drive up construction service delivery charges, much of which are financed by American taxpayers."

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

WASHINGTON, Aug. 11—Construction input prices were unchanged in July relative to the previous month, 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 fell 0.1% for the month.

Overall construction input prices are 3.1% lower than a year ago, while nonresidential construction input prices are 2.7% lower. However, prices increased in all three energy subcategories. Natural gas prices were up 11.0% in July, while crude petroleum and unprocessed energy materials prices increased 8.4% and 8.0%, respectively.

“Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy,” said ABC Chief Economist Anirban Basu. “It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S. economy. As supply chains have normalized, unmet demand has been more readily satisfied. That has propelled transactional volume and economic growth. At the same time, the improved supply chain has helped push prices lower, contributing to the disinflation observable both in yesterday’s consumer price index data and today’s producer price index release.

“With the exception of energy prices, which are heavily influenced by a cocktail of geopolitics, weather and investor frenzy, construction materials prices should be reasonably stable during the months to come,” said Basu. “One exception may be construction equipment prices. The price of equipment expanded nearly 2% on a monthly basis in July and nearly 10% over the past year. Many contractors continue to complain about lengthy lead times for equipment as the nation continues to expand spending on infrastructure.”

WASHINGTON, Aug. 4—The construction industry added 19,000 jobs on net in July, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has expanded by 198,000 jobs, an increase of 2.5%. 

Nonresidential construction employment increased by 10,600 positions on net, with growth in two of the three subcategories. Nonresidential building added 10,500 positions, while heavy and civil engineering added an additional 2,200 jobs. Nonresidential specialty trade lost 2,100 jobs on net.

The construction unemployment rate rose to 3.9% in July. Unemployment across all industries declined from 3.6% in June to 3.5% last month.

“The economy is slowing, and inflation remains problematic,” said ABC Chief Economist Anirban Basu. “While many economists have reversed their predictions of a near-term recession and conclude that the Federal Reserve will be able to engineer a soft landing, today’s report is a reminder that risks remain. Not only is the economy slowing, but wage pressures remain. Accordingly, the war on excess inflation has not yet been won, which means that the Federal Reserve may not be done raising rates.

“That said, nonresidential construction contractors continue to expand their payrolls,” said Basu. “General and public works contractors collectively hired thousands of people in July. However, weakness in several commercial real estate segments may help explain job losses among nonresidential contractors last month. Nonetheless, construction worker wages continue to grow rapidly in the context of structural skills shortages. According to data from the ADP Pay Insights report, construction workers who stayed at their job saw a 6.4% wage increase over the past year, or more than twice the rate of inflation.

“ABC’s Construction Confidence Index indicates that contractors will collectively continue to expand staffing for the rest of 2023,” said Basu. “That will presumably keep upward pressure on industry wages even if the broader economy continues to soften.”

WASHINGTON, Aug. 8—Associated Builders and Contractors issued the following statement in response to the U.S. Department of Labor today issuing a final rule, Updating the Davis-Bacon and Related Acts Regulations, which will make drastic revisions to the Davis-Bacon Act and Related Acts regulations that apply to federal and federally assisted construction projects funded by taxpayers.

“This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “Unfortunately, the DOL’s final rule disregards the feedback of ABC contractors, construction industry stakeholders and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation. Instead, the DOL is moving forward with dramatic changes to prevailing wage regulations, reversing much-needed reforms that were established nearly 40 years ago, and unlawfully increasing the regulatory burden on small businesses, new industries and public works projects.”  

“With this final rule, the DOL has abandoned any possibility of instituting commonsense reforms to Davis-Bacon regulations to ensure accurate and prompt prevailing wage determinations while providing the regulated community with the clarity needed to deliver high-quality projects at an affordable cost to taxpayers,” said Brubeck. “Instead, the rule makes it much more likely that the DOL will adopt union wage scales at the prevailing wage at a greater frequency than in current practice, which already adopts union wage scales at improbable rates considering just 11.7% of the construction industry is unionized. ABC will now be forced to take appropriate legal action to address the numerous illegal provisions of the final rule and protect our members, and ultimately hard-working taxpayers, from the harmful impacts of this regulation.

“The final rule comes in the midst of challenging economic conditions facing the construction industry, including high materials costs and a skilled labor shortage of more than half a million in 2023,” said Brubeck. “The onerous new requirements and artificial inflation of construction costs imposed by this rule will only exacerbate these headwinds and undermine taxpayer investments in infrastructure.”

ABC submitted nearly 70 pages of comments on the DOL’s proposed rule, and its more than 50 significant changes, urging the DOL to withdraw the proposal.

The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects of $2,000 or more to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers. According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers.

The Congressional Budget Office estimates that repealing the 1930s-era Davis-Bacon Act would save the federal government $24.3 billion in spending between 2023 and 2032. A May 2022 study found that the Davis-Bacon Act costs taxpayers an extra $21 billion a year, increases the price tag of construction projects by at least 7.2% and inflates construction workforce wages by 20.2% compared to local market averages if the DOL calculated prevailing wages using modern and scientific methodology via the U.S. Bureau of Labor Statistics.

Learn more at abc.org/davisbacon.

WASHINGTON, Aug. 1—National nonresidential construction spending increased 0.1% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. Spending is up 18% over the past 12 months. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.07 trillion in June.

Spending increased on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending was virtually unchanged, while public nonresidential construction spending rose 0.3% in June.

“Nonresidential construction spending growth downshifted over the past two months,” said ABC Chief Economist Anirban Basu. “While stakeholders can expect ongoing spending growth in public nonresidential construction segments as more Infrastructure Investment and Jobs Act monies flow into the economy, private developer-driven activity appears to be drying up in the context of higher costs of capital and tighter credit conditions.

“Among other things, these dynamics will translate into larger spreads in performance among contractors,” said Basu. “While those that focus on public work stand to remain busy for years to come, those who specialize in meeting the needs of developers of office buildings, hotels and shopping centers are likely to struggle to support backlog going forward. The good news is that there remain private construction segments associated with rosier prospects, including manufacturing, data centers and health care.”

WASHINGTON, Aug. 1—The construction industry had 374,000 job openings on the last day of June, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings declined by 5,000 last month and are down 9,000 from the same time last year.

“Some will focus on the fact that construction job openings declined in June,” said ABC Chief Economist Anirban Basu. “But the real story is that, despite massive interest rate increases and tighter credit conditions facing developers and others that purchase construction services, the number of unfilled jobs remains so elevated by historical standards. With a plurality of contractors indicating that they intend to increase staffing levels over the next six months, according to ABC’s Construction Confidence Index, many will continue to report that their leading challenge is the retention and recruitment of highly trained construction craftspeople.”

WASHINGTON, Aug. 2—The not seasonally adjusted national construction unemployment rate was 0.1% lower in June 2023 from a year ago, down from 3.7% to 3.6%. According to a state-by-state analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors, 15 states had lower unemployment rates over the same period, seven were unchanged and 28 states were higher. All states posted an unemployment rate lower than 8%.  

National NSA payroll construction employment was 199,000 higher than in June 2022. From February 2022 through June 2023, seasonally adjusted construction employment was above its pre-pandemic peak of 7.6 million.

In October 2021, residential construction employment moved above its pre-pandemic peak, while nonresidential construction employment only recently did so in February 2023. June 2023 seasonally adjusted residential payroll construction employment was 308,000 above its pre-pandemic peak while nonresidential payroll construction employment was 28,000 above its pre-pandemic peak.

In June 2023, 35 states had lower construction unemployment rates compared to June 2019 (pre-pandemic) and 15 states had higher rates.

“Construction activity and employment has been surprisingly strong in the face of higher interest rates. Residential construction employment has been aided by home builders catching up with their projects and increased demand for new homes due to the low inventory of existing homes for sale. Meanwhile, nonresidential construction activity and employment are rising, stimulated by funding and tax incentives for manufacturers, states and localities from federal programs such as the CHIPS Act and the Infrastructure Investment and Jobs Act,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “However, recent and possible future increases in the Federal Reserve’s target federal funds rate and various lenders tightening standards for commercial construction projects are a headwind for future construction projects and employment.”  

Recent Month-to-Month Fluctuations

National and state unemployment rates are best evaluated on a year-over-year basis because these industry-specific rates are not seasonally adjusted. However, due to the decline in the adverse effects on the economy from the COVID-19 pandemic, high and rising interest rates and other national and international occurrences, month-to-month comparisons offer insight into the rapidly shifting economic environment for construction employment.

In June 2023, 15 states had lower estimated construction unemployment rates than in May, 28 states had higher rates and seven had the same rate.

The Top Five States

The five states with the lowest estimated NSA construction unemployment rates June 2023 (seven states due to ties in the rates) were:

1. Maryland, 0.4%

2. North Dakota, 0.6%

3. Maine and Wyoming (tie), 1%

5. Montana, South Dakota and Utah (tie), 1.1%

Maryland posted its lowest June NSA estimated construction unemployment rate on record. North Dakota attained its second lowest June construction unemployment rate. Maine, Montana, Utah and Wyoming all had their lowest June construction unemployment rate on record. South Dakota had its second lowest construction unemployment rate over the past seven years (since June 2016), behind last year’s 0.6% rate.

The Bottom Five States

The five states with the highest June 2023 estimated NSA construction unemployment rates were (note that Hawaii’s unemployment rate is for construction plus mining plus logging):

46. Hawaii, 5.7%
47. Nevada, 5.9%
48. New Jersey, 6.4%
49. Rhode Island, 7.1%
50. Connecticut, 7.5%

Rhode Island had the largest monthly decline in its rate (down 1.4%).

Click here to view graphs of overall unemployment rates (Tab 1) and construction unemployment rates (Tab 2) showing the impact of the COVID-19 pandemic, including a graphing tool that creates a chart for multiple states. Click here to view graphs of overall unemployment rates (Tab 1) and construction unemployment rates (Tab 2) showing the impact of the COVID-19 pandemic, including a graphing tool that creates a chart for multiple states. To better understand the basis for calculating unemployment rates and what they measure, check out the Background on State Construction Unemployment Rates.

WASHINGTON, July 17—ABC announced its opposition to the U.S. Department of Labor’s Occupational Safety and Health Administration’s Improve Tracking of Workplace Injuries and Illnesses final rule, issued today, which will undo the ABC-supported provisions of the 2019 final rule promulgated under the Trump administration and reprise the 2016 Obama-era rule.

“Unfortunately, the Biden administration is moving forward with a final rule that does nothing to achieve OSHA’s stated goal of reducing injuries and illnesses,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Instead, the final rule will force employers to disclose sensitive information to the public that can easily be manipulated, mischaracterized and misused for reasons wholly unrelated to safety, as well as subject employers to illegitimate attacks and employees to violations of their privacy.

“For open shop construction contractors, these are not hypothetical concerns,” said Brubeck. “Over the years, high-quality, safety-conscious contractors have been targeted by unions and union-front organizations making false or distorted claims of ‘unsafe’ contracting based on isolated incidents taken out of context. The records at issue in the final rule are not reliable measures of a company’s safety record or of its efforts to promote a safe work environment, as they provide no context about the injuries or illnesses reported.”

“Smaller companies will also be negatively impacted by expanding the mandate to establishments with 100 or more employees,” said Brubeck. “The recorded information can easily be backtracked to identify specific injuries and illnesses, and thereby the medical information of individuals in the workplace, violating their privacy.”

The final rule requires establishments with 100 or more employees in certain designated industries to electronically submit information from their OSHA Forms 300 and 301 to OSHA once a year. Establishments with 20 to 249 employees in certain industries will continue to be required to electronically submit information from their OSHA Form 300A annual summary to OSHA once a year. All establishments with 250 or more employees that are required to keep records under OSHA’s injury and illness regulation will also continue to be required to electronically submit information from their Form 300A to OSHA once a year. OSHA intends to make much of the data it collects publicly available online. The final rule becomes effective on Jan. 1, 2024.

These OSHA forms contain sensitive and personal medical information about individual employees, which the government has historically kept private. This includes workers’ home addresses, dates of birth and detailed information about their injuries.

ABC submitted comments to the DOL outlining its concerns in June 2022.

WASHINGTON, July 13—Construction input prices remained unchanged in June compared to the previous month, 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 were also unchanged for the month.

Overall construction input prices are 4.9% lower than a year ago, while nonresidential construction input prices are 4.5% lower. Prices decreased in all three energy subcategories in June. Crude petroleum prices were down 5.9%, while natural gas prices fell 5.3%. Unprocessed energy materials prices decreased 5.0% for the month.

“The pandemic-induced period of rapid construction input cost increases is over,” said ABC Chief Economist Anirban Basu. “Today’s Producer Price Index data, along with yesterday’s Consumer Price Index release, show that inflation has slowed, at least with regard to goods prices. This recent moderation is partially due to a drastic improvement in supply chains; both international and domestic freight rates have plunged back toward pre-pandemic levels. 

“Despite this recent cooling, construction input prices are still up more than 38% since the start of the pandemic,” said Basu. “That’s over twice the increase observed for economywide prices over that span. Contractor confidence declined last month, according to ABC’s Construction Confidence Index, and the combination of expensive materials, high interest rates that are likely to rise again at the Federal Reserve’s July meeting and tight credit conditions will put downward pressure on construction activity over the next few quarters.”

WASHINGTON, July 12—Associated Builders and Contractors today applauded the U.S. House of Representatives Committee on Oversight and Accountability’s passage of the Fair and Open Competition Act, H.R. 1209. FOCA would protect federal and federally assisted construction contracts from anti-competitive and inflationary government-mandated project labor agreements and allow merit shop contractors and their skilled employees to have a fair chance at competing to win government contracts to build taxpayer-funded construction projects.

“FOCA would ensure that all of America’s workers and qualified contractors are provided the opportunity to compete to build long-lasting, quality projects at the best price for hardworking taxpayers,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “PLA mandates discourage experienced contractors and the 88.3% of the U.S. private construction workforce that chooses not to join a union from competing to win taxpayer-funded contracts to rebuild America’s infrastructure.”

Federal government policies promoting and mandating PLAs on federal and federally assisted contracts will needlessly increase construction costs by 12% to 20% and result in fewer infrastructure projects and jobs created by federal investment in America’s roads, bridges, schools and water and energy infrastructure. President Joe Biden’s February 2022 Executive Order 14063 requires federal general contractors and subcontractors to enter into a PLA as a condition of winning a contract to perform services on a federal construction project worth $35 million or more.

ABC submitted more than 40 pages of comments to the Federal Acquisition Regulatory Council calling on the Biden administration to withdraw a controversial proposed rule codifying EO 14063, which is expected to be issued later this year In addition, ABC has identified a significant number of Biden administration federal agency grants––totaling more than $250 billion for infrastructure projects procured by state and local governments––subject to language and policies promoting PLA mandates and preferences that will increase costs and reduce competition on federally assisted construction projects.

Ahead of the committee vote, ABC sent a letter to the committee and led a coalition letter signed by a coalition of 26 construction and business organizations in support of FOCA.

FOCA (H.R. 1209/S. 537) was introduced by Oversight and Accountability Chairman James Comer, R-Ky. and Sen. Todd Young, R-Ind.

WASHINGTON, July 11—Associated Builders and Contractors reported today that its Construction Backlog Indicator remained unchanged at 8.9 months in June, according to an ABC member survey conducted June 20 to July 5. The reading is unchanged from June 2022.

View the historic Construction Backlog Indicator and Construction Confidence Index data series.

Backlog in the infrastructure category increased for the third straight month and is now at the highest level in nearly two years. On a regional basis, the South remains the region with the highest backlog, despite being the only region in which backlog declined in June.

ABC’s Construction Confidence Index reading for sales, profit margins and staffing levels moved lower in June. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“Backlog once again remained stable in June despite tight credit conditions and high interest rates,” said ABC Chief Economist Anirban Basu. “While those risk factors drove a decline in all three Construction Confidence Index series, contractors continue to signal an expectation that sales, profit margins and staffing will expand over the second half of 2023.

“Many aspects of the economy, including consumer spending and the labor market, held up better than expected in the second quarter,” said Basu. “That bodes well for economic growth over the summer, but also suggests that the Federal Reserve may raise rates higher and keep them there longer in their ongoing efforts to suppress inflation. All else equal, that will reduce construction activity in the quarters to come.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

WASHINGTON, July 10—Associated Builders and Contractors member contractors invested more than $1.5 billion to provide nearly 1.3 million course attendees with craft, leadership and safety education in 2022, according to its 2023 Workforce Development Survey, down from $1.6 billion in 2021. The annual assessment quantifies the scope of ABC members’ workforce development initiatives to advance their employees’ careers in commercial and industrial construction to build the places where Americans live, work, learn, heal and play.

Key findings include:

• ABC contractors invested an average of 8.0% of payroll on workforce development in 2022, up from 7.4% in 2021, responding to the need for more than half a million additional construction workers in 2023.
• Safety education for more than 700,000 course attendees accounted for the greatest share of spending, at 59%, up from 56% in 2021.
• Trade and specialty contractors boosted their share of the total workforce development investment, growing to 42% in 2022 from 33% in 2021.

“ABC member contractors are building the people who build America by investing billions to cultivate their long-term skill sets, creating a brighter future for both workers and workers’ families,” said Greg Sizemore, ABC’s vice president of health, safety, environment and workforce development. “ABC member contractors are investing in flexible, competency-based and market-driven education methodologies to build a construction workforce that is safe, skilled and productive. Continually upskilling our people, our most valuable asset, means the merit shop construction industry is ready to build the infrastructure, manufacturing plants, data centers and other buildings that will keep America competitive in the global marketplace.”

ABC’s all-of-the-above approach to workforce development has produced a network of ABC chapters and affiliates across the country that offer more than 800 apprenticeship, craft, safety and management education programs—including more than 300 government-registered apprenticeship programs across 20 different occupations—to build the people who build America.

Industry consulting firm FMI conducted the 2022 Workforce Development Survey from Jan. 4 to May 5, 2023. Aggregated data was derived by calculating the average amount spent on education by each respondent and multiplying that by the total number of ABC contractor members.

WASHINGTON, July 7—Construction industry employment increased by 23,000 in June, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. Industry employment has risen by 198,000 jobs since June 2022, an increase of 2.6%, to 7.947 million. 

Nonresidential construction employment rose by 12,200 positions on net, with positive growth in two of the three subcategories. Heavy and civil engineering added 7,300 positions, while nonresidential building added an additional 5,400 jobs. Nonresidential specialty trade contractors lost 500 jobs on net.

The construction unemployment rate increased to 3.6%. Unemployment across all industries decreased from 3.7% in May to 3.6% in June.

“Theory suggests that the roughly 500-basis point increase in the federal funds rate over the past year would weigh on the demand for construction workers, yet the industry continues to add thousands of jobs each month,” said ABC Chief Economist Anirban Basu. “Contractors have collectively added jobs in 15 of the past 16 months, and ABC’s Construction Confidence Index suggests they will continue to increase staffing levels through the remainder of the year.

“The June jobs report, along with yesterday’s JOLTS data, confirm that labor shortages will continue to provide a stiff headwind to hiring,” said Basu. “The construction unemployment rate inched up to 3.6% in June, but that’s still the second-lowest rate on record. Across all industries, unemployment remains near a 50-year low, and the prime age (24-54) employment-to-population ratio rose to the highest level since 2001. High interest rates and the cumulative effects of inflation will eventually catch up with the economy. For now, however, the labor market remains overheated.”

WASHINGTON, July 6—The construction industry had 366,000 job openings on the last day of May, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 19,000 last month but are down by 26,000 from the same time last year.

“Today’s JOLTS data confirm that labor shortages remain firmly in place,” said ABC Chief Economist Anirban Basu. “This shortfall has shifted leverage to workers. Contractors laid off just 1.5% of their employees in May, the lowest rate in exactly a year and the fourth-lowest rate on record, while 2.9% of construction workers quit during the month, the highest share since last August.

“These dynamics will persist during the next few months,” said Basu. “A majority of contractors expect to increase their staffing levels over the next six months, according to ABC’s Construction Confidence Index, and today’s ADP employment report estimated that the construction industry added nearly 100,000 jobs in June. The combination of high interest rates and tight credit conditions will eventually drag down demand for construction services, but until that time the industry will continue to be defined by worker scarcity.”