The prices of most building materials increased in April, according to the latest Producer Price Index release by the Bureau of Labor Statistics on Wednesday.
Meanwhile, the count of unfilled jobs in the US construction sector increased in March and approached the post-Great Recession high level. According to the BLS Job Openings and Labor Turnover Survey and NAHB analysis, released Tuesday, the number of open construction sector jobs increased to 248,000 in March.
Elsewhere, ninety-one per cent of US remodellers reported shortages of labour available to perform finished or rough carpentry work, and over 40 per cent said these shortages were serious, in response to special questions on NAHB’s Remodeling Market Index survey for 3Q 2017, released also Tuesday.
US Construction Materials Prices, Construction Labour
The prices of most US building materials increased in April, according to the latest Producer Price Index release by the US Bureau of Labor Statistics Wednesday. Oriented strand board (OSB) led price increases, up +7.1% since March (not seasonally adjusted). The indexes for ready-mix concrete (+0.6%), gypsum products (+0.1%), and the aggregate index for goods inputs to residential construction (+0.9%) also edged higher. Softwood lumber prices fell 1.9% month-over-month, according to the report.
The 0.9% increase in prices paid for residential construction inputs (goods) was the fourth consecutive monthly increase. The index has risen 3.9% over the first four months of 2018 and sits 6.2% higher than it did in April 2017. Since January 2017, the index for prices paid for goods inputs to residential construction has only declined twice—in May and December of 2017—each time falling just 0.1%.
BLS also reported that prices paid for gypsum products were essentially flat in April (+0.1%, seasonally adjusted). Although price increases have moderated since the 4.2% jump in February, gypsum prices are 3.3% higher than they were to at the beginning of 2018.
Elsewhere, according to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, released Tuesday, the number of open construction sector jobs in the US increased to 248,000 in March. The post-recession high count of open, unfilled construction jobs was 255,000 in July of last year. The number of open construction sector jobs was 179,000 a year ago.
The open position rate (job openings as a percentage of total employment plus current job openings) for March increased to 3.4%. On a smoothed, twelve-month moving average basis, the open position rate for the construction sector remained at 2.9%, a post-recession high. The peak (smoothed) rate during the building boom prior to the recession was just below 2.7%. For the current cycle, the sector has been above that rate since November 2016.
The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.
The construction sector hiring rate, as measured on a twelve-month moving average basis, ticked down to 5.1% in March. The twelve-month moving average for layoffs is falling again, held at 2.6%.
NAHB expects construction sector net hiring to continue in 2018 as the single-family construction market expands.
Otherwise, ninety-one per cent of US remodellers reported shortages of labour available to perform finished or rough carpentry work, and over 40 per cent said these shortages were serious, in response to special questions on NAHB’s Remodeling Market Index (RMI) survey for 3Q 2017, released also Tuesday.
The RMI survey asked US remodellers about availability of labour in 15 specific occupations. In 3Q 2017, over half of remodellers reported shortages in 12 of the 15 categories. As usual, reported shortages were most widespread for the three categories of carpenters, but over 70 per cent of remodellers also reported shortages of bricklayers & masons, drywall installers, and concrete workers.
For every one of the 12 trades covered by NAHB’s RMI survey in both years, the share of remodellers reporting a shortage jumped by more than 10 percentage points between 2016 and 2017. The most common effects of the shortages have been causing remodellers to pay higher wages, forcing them to raise prices to customers, and making it difficult to complete projects on time. These are the same effects single-family builders cite most often.