The war in Ukraine and Western countermeasures are stoking further price increases for numerous construction materials. Readers have passed along these steel pricing notices, among others, received and/or effective on Tuesday: “Nucor Tubular/Atlas Tube just announced an increase of $150/ton effective immediately.” Commercial Metals Company (CMC) notified customers in the Southeast, “Effective immediately, we are increasing the transactional price for reinforcing steel products from our East Region Mills in South Carolina, Florida, Tennessee, and New Jersey, $100/ton.” “Merchant [channels, bars, other shapes] went up $80/ton.” “Plate went up $50/ton, flats going up as well.” “Stainless steel pricing just went up by 30%.” “Stainless steel master distributors and manufacturers are limiting access to inventory by raising pricing, refusing to quote, and limiting the validity time for quotations as a result.” On Monday, Gutterman’s Supply Corp. of America notified customers, “Aluminum coil and aluminum accessories will go up approximately 10%,” effective April 1. On March 1, Fortiline Waterworks notified customers of price increases exceeding 33% and extended lead times for PVC, polyethylene/polypropylene, and ductile iron pipe and fittings, with “no inventory availability at the plants for the remainder of this year….material will continue to be priced at time of shipment.” Readers are invited to send price and supply chain information to ken.simonson@.org.
The national retail average price of on-highway diesel fuel was $4.85 per gallon, the Energy Information Administration (EIA) on Monday, a record high (not adjusted for inflation) and a record one-week increase of 75 cents/gallon. “U.S. demand for distillate fuel [diesel and heating oil] has been high since early 2021 because of increased demand for trucking and rail freight transport,” EIA in Thursday’s “Today in Energy” article. “Furthermore, cold weather in January 2022 contributed to increased demand for heating oil in the Northeast this winter, a region that relies on heating oil to heat almost 20% of its homes. Despite increased distillate demand, refinery production of distillate remains below pre-pandemic levels, partly because of comparatively slower demand growth for other petroleum products such as motor gasoline and jet fuel.”
Terminal operators at the ports of Los Angeles and Long Beach say “containers have been moving more quickly through the ports and on to inland destinations recently,” the Wall Street Journal today. The companies at the heart of the supply-chain logjams don’t expect the respite to last, but they say that adjustments made in recent months, including the addition of space to hold containers off the ports, may help keep the ships and their cargoes moving….Terminal operators say a sharp decline in the number of workers calling in sick with Covid-19 has also helped….Measures such as the time boxes wait for handling have also slipped from historic highs. Import volumes are expected to pick up over the coming months, however. And operators say many of the underlying supply-chain issues that caused backlogs in 2021 persist. Warehouses still don’t have enough workers or space to process and store boxes, executives at companies in the region said, and trucking firms remain short of drivers and the trailers needed to pull containers.”
There were 384,000 job openings in construction, not seasonally adjusted, at the end of January, a year-over-year (y/y) increase of 81,000 (27%) from January 2021, BLS on Wednesday in its latest Job Openings and Labor Turnover Survey (JOLTS) release. That was the largest January total, by far, in the 22-year history of the series Hires declined by 15% y/y to 259,000. While a decrease in hires might suggest contractors are pulling back, they did not lay off many workers. Layoffs totaled 190,000, and the layoff rate was 2.6% of employment. The excess of openings over hires implies the industry would have hired at least twice as many workers if they had been available. Quits soared 28% y/y across the total nonfarm sector (the so-called “great resignation”) but fell 1.6% in construction. Together, the rising openings and flat quits figures suggest construction firms are having trouble attracting new employees but are doing better than other sectors at retaining current employees. A challenge for construction firms in filling onsite jobs is that “More than 60% of job seekers on ZipRecruiter say they would prefer remote positions,” the Washington Post on Thursday, citing ZipRecruiter’s , Julia Pollak.
From early 2020 to early 2021, the migration rate--the percentage of people who changed residences--was at the lowest rate in the 74-year history of the data, the Census Bureau on Monday. Migration, as well as changes in household size and ages, contributes to demand for residential, school, and other construction. However, the pandemic may have encouraged some migration of tech jobs, according to a Brookings Institution posted on Thursday. “In nearly half of the…large metro areas [apart from ‘superstar and rising star metro areas’], tech growth rates increased in 2020. These included…Philadelphia, Minneapolis, [ Cincinnati, Charlotte], San Antonio, Nashville, Tenn., Birmingham, Ala., New Orleans, Greensboro, N.C., Jackson, Miss., [Stockton, Calif.,] Chapel Hill, N.C. [, Madison, Wis.,] Virginia Beach, Va., Ogden, Utah, Albuquerque, N.M., Tucson, Ariz., and El Paso, Texas….Santa Barbara, Calif., Barnstable, Mass., Gulfport-Biloxi, Miss., Pensacola, Fla., and Salisbury, Md. all saw their tech employment surge by 6% or more. Likewise, attractive and convenient college towns such as Boulder, Colo., Lincoln, Neb., Tallahassee, Fla., Charlottesville, Va., and Ithaca, N.Y. all grew their tech jobs by more than 3% during the first year of the pandemic.”