2021 sees ‘rocky’ start with fewer construction starts, rising prices
By Riley SimpsonFebruary 23, 2021
Although Dodge Data & Analytics reported a 4% drop in total construction starts in January 2021 – for a seasonally adjusted rate of $794.3 billion – Richard Branch, the company’s chief economist, said “patience will be key” as the construction industry, as well as the U.S. economy in general, recover from the Covid-19 pandemic.
“The tenuous beginning to construction starts in 2021 highlights the long and rocky road ahead for the sector this year,” Branch said. “Over the course of the year, the economy will recover as more Americans receive their vaccinations. However, the construction sector’s recovery will take time to materialize due to the deep scars caused to the industry by the pandemic.”
Within the 4% dip in total construction starts, nonresidential building starts were flat in January, residential starts fell 4%, and nonbuilding starts were down 10%.
Geographically, only two of the five regions (the Northeast and West) reported increases in construction starts; the other three regions (the Midwest, South Atlantic and South Central) reported fewer starts in January.
Associated General Contractors of America (AGC) announced a continuing trend of rising prices for construction materials in its data digest.
According to AGC, a structural-steel distributor reported that prices for hollow structural section tube/pipe products have increased 56% since August 2020, along with a 24% hike in wide-flange prices.
The distributor said that although the materials are still available, the lead times have been extended and are forecasted to continue into 2021’s second quarter, or further into the year.
For more in-depth coverage of the ongoing issues of materials shortage and high prices, read CONEXPO-CON/AGG 365’s feature.