The Bureau of Labor Statistics estimates that overall employment for those working in the construction industry will continue to grow by 12% over the next several years. That statistic, along with United States’ 4.0 unemployment rate, as of the end of June, is a strong sign that the construction industry is on the rise. However, there are still a few major issues that are plaguing the field in 2018.
So what are these problems within the construction industry? Read on to discover what these challenges are and how exactly they are having an impact.
Higher Costs for Building Materials
The cost of building materials has continued to rise from 2017 throughout 2018. Prices for construction materials and nonresidential materials are both over 5% higher than they were last year, and the cost of construction materials has been on a consistent rise for nearly two dozen months.
Specifically, the prices for fabricated structural steel, carbon steel pipe, alloy steel pipe, lumber, plywood, copper and brass mill shapes, gypsum products, and plastic construction products have all increased over the past year.
These higher prices for materials have led to more expensive construction projects overall. The cost for certain projects has risen anywhere from 10% to 20% over the past year, and the two main reasons for that increase are building materials and labor.
Unfortunately, these already high prices for building materials may go up even more because of tariffs.
Experts believe that mills will have trouble continuing to fill the outpouring of orders they have received for particular products due to tariffs. This inability to meet those orders could cause broken budgets and delay even more construction projects.
Recent tariff-related problems include the United States’ dispute with Canada over lumber imports. Also, the America’s imposed tariffs on numerous types of steel and future additional tariffs on steel, aluminum, and Chinese construction products are also expected to be major challenges moving forward.
While the United States’ overall unemployment rate remains low, the same can’t be said for the unemployment rate within the construction industry nationwide. For example, the unemployment rate for construction workers in Arkansas hit 11% this past March.
However, in states where unemployment in the construction industry is much lower than that, workers have been encouraged to quit their jobs and look for ones better ones. Thus, retaining employees has become incredibly difficult for certain construction companies who just can’t afford what their workers are asking from them, especially with the increasing costs of building materials.
Many workers are leaving for jobs that will pay them as little as one more dollar per hour, while others are seeking positions with more major pay increases and better benefits, along with bonuses and other incentives. This type of employee mindset has made the construction industry one of the most competitive fields out there, and while this type of competition can be good for some workers looking for job upgrades, it can also cause major headaches for managers trying to complete projects on time.
The more general, bigger-picture outlook for the construction industry, throughout 2018 and the next few years to come, is certainly positive. But that doesn’t mean that these current difficulties should be ignored.
Those working in the construction industry need to be informed and educated about these issues and look for ways, both big and small, that they can combat them and make their field a stronger, more effective, and more lucrative business.
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