A recent study says machine-guided equipment can ease the skills shortage. Read on for more details. 

This Month in Construction: February 2021

Welcome to Constructible's take on this month in construction. Here, we walk you through some of CEREBRA's findings for construction's latest economic indicators. We also share noteworthy news, events, videos, and thought-provoking stories you may have missed.

February 2021: What Construction's Market Data Tells Us

The source: Construction Confidence Index (Published by Associated Builders and Contractors)

The measurement: The CCI reflects contractors' expectations over the coming 6-month period along three dimensions: sales, profits, and staffing. Readings above 50 indicate an expectation of generally improving conditions in the U.S. non-residential construction industry, while readings below 50 indicate expectations of deteriorating conditions. 

Current results: Sales and staffing level readings increased in January 2021 from December 2020, although they still have not returned to January 2020 levels of 68.8 and 67.2, respectively. Profit margin readings slipped slightly from December 2020.

The takeaway: For the first time since June 2020, we're seeing confidence in sales and staffing again. Profits level expectations have not yet begun to recover- keep reading to understand why.

The source: Construction Backlog Indicator (Published by Associated Builders and Contractors)

The measurement: The CBI reflects the amount of work already under contact but not yet performed by commercial, industrial, and heavy highway/infrastructure contractors in the U.S. 

Current results: The backlog indicator rose to 7.5 months in January 2021, an increase of 0.2 months from December 2020, but 0.9 months lower than in January 2020.

The takeaway: The huge leap in January in the value of the backlog is almost to pre-pandemic levels. With sales confidence and staffing levels high, backlog and construction starts may start to recover in the coming quarter.

The source: Construction Starts (Published by Dodge Data & Analytics)

The measurement: This data measures new U.S. commercial and residential projects that begin during any particular month, as represented by millions of dollars, at a seasonally adjusted rate.

Current results: Total construction starts lost 5% in December 2020, falling to a seasonally adjusted annual rate of $784.3 billion. Non-residential building starts fell 11% during the month, while non-residential building starts were 5% lower. Residential starts were essentially flat over the the month.

The takeaway:  While single family housing, warehouse, and highway and bridge starts are bright spots, total construction starts have not yet rebounded. With sales confidence and staffing levels high, backlog and overall construction starts may start to recover in the coming quarter.

The source: Construction Spend (Published by United States Census Bureau)

The measurement: U.S. monthly construction spending reflects private and public construction spending during any particular month, as represented by millions of dollars, at a seasonally adjusted annual rate.

Current results: Construction spend during December 2020 was estimated at $1,490.4 billion, 1% above the November 2019 estimate of $1,475.6 billion, and 5.7% above the December 2019 estimate of $1,410.3 billion.

The takeaway: Spending on private and public construction continues to slowly climb - a good indicator of current work being performed. 

The source: The Architectural Billings Index published by AIA (American Institute of Architects) 

The measurement: The ABI offers a nine- to 12-month glimpse into the spending and demand for non-residential construction activity. A score of 50 and above indicates improvement in levels of construction. 

Current results: The billings score declined from 46.3 in November 2020 to 42.6 in December 2020. The design contracts score declined slightly from 48.6 in November 2020 to 48.5 in December 2020.

The takeaway: Indicators of future work weakened a bit in December, probably due to the uncertainty winter lockdowns and restrictions created. The release of January 2021's data will paint a clearer picture.

The source: Construction Cost Index (Published by Turner Construction)

The measurement: The CCI measures costs in the non-residential building construction market in the U.S., including: labor rates and productivity,  material prices, and the competitive condition of the marketplace.

Current results: The score decreased to a value of 1171, a -0.51% quarterly reduction from Q2 2020.

The takeaway: While material prices are still high and eroding profits, we saw the first decline of the CCI since it began. Since the pandemic saw a reduced number of project starts, competition has risen and work is being offered for reduced rates. 

In Case You Missed It: What's New for Construction in February 2021

News: 

• Huge win! New study finds machine-guided equipment can ease the construction labor shortage.
• Dear U.K. readers: Check it out — Trimble MEP releases new electrical design and engineering solutions.
• Towards BIM standards in the U.S.? Can we just say "yay!"
• Office hours for manufacturers who need to become more data-driven? Brilliant. 

How-to's: 

• How to tackle the VAT reverse charge for construction.
• Construction owners: Here's the construction project management toolkit built for just for you.
• "We need to get into prefab or it's going to take our work." - Overheard at 2020's Advancing Prefabrication Conference and addressed here.
• Need to convince your company (or yourself) why moving to the cloud is best for electrical and ICT estimators? Here's 7 reasons. 
• How to use 3D mapping and machine control systems on complex earthworks projects.
• A few ways architects can meet ambitious energy-efficient mandates during concepting.

Interesting reads of the month: