Top 10 construction news stories of 2022
By Jenny LescohierDecember 13, 2022
It’s been year full of unexpected challenges for construction, including a war, runaway inflation, unprecedented supply chain challenges, not to mention the lingering effects of the pandemic as well as changes among some of the biggest names in the industry.
CONEXPO-CON/AGG 365 has reported on it all, so let’s take a walk through the events of the past year before we begin a fresh start in 2023.
Following are news stories ranked in order of audience popularity, starting from 10th leading up to first:
10. Construction struggles due to nearly universal lack of skilled and employable workers - The skilled labor shortage in construction is a well-known critical issue facing the industry, but the severity of the lack of qualified workers reveals problems that demand immediate solutions if the U.S. is to meet growing construction demand.
According to results of a workforce survey conducted by the Associated General Contractors of America (AGC) and Autodesk, 93% of construction firms reported they have open positions they are trying to fill, and among them, 91% are having trouble filling at least some of those positions – particularly among the craft workforce that performs the bulk of on-site construction work.
9. Used equipment prices up 45% over last year - Prices for used equipment and trucks in Canada and the U.S. reached record highs in 2021, with medium earthmoving machines up 45% over last year.
Supply chain issues, tight supply and unprecedented demand all played major factors in used equipment sales last year, according to Ritchie Bros. 2022 Market Trends Report for used earthmoving and aerial equipment.
“In the United States, volumes were down in large and medium earthmoving categories, as well as aerial equipment, while prices rose significantly,” the report noted.
8. Caterpillar to move global headquarters to Texas - Caterpillar Inc. is moving its global headquarters once again, this time all the way out of the state of Illinois to its existing office in Irving, TX.
Currently located in Deerfield, IL, the company’s headquarters were in Peoria, IL until its move to the Chicago suburb in 2018. The world’s largest construction equipment manufacturer has been based in Illinois since its inception as Caterpillar Tractor Company in 1925.
“We believe it’s in the best strategic interest of the company to make this move, which supports Caterpillar’s strategy for profitable growth as we help our customers build a better, more sustainable world,” said Chairman and CEO Jim Umpleby.
7. Price of war in Ukraine on U.S. construction - The full effect of the crisis in Ukraine is yet to be seen, however, industry experts from leading construction organizations weighed in on the projected impacts it might have on the industry.
“Russia’s unjustified attack on Ukraine has pushed up the price of diesel fuel, gasoline and other petroleum products used in construction,” said Brian Turmail, vice presudent, public affairs and strategic initiatives of Associated General Contractors of America (AGC) after the war broke out last February. “The war and counter measures by western nations... affect the supply and cost of materials and equipment, including steel, aluminum, copper, zinc and nickel.”
Anirban Basu, chief economist with Associated Builders and Contractors (ABC), agreed about supply chain challenges, but also offered a different spin, predicting the nation’s defense sector will receive a significant bump in orders, thanks to the crisis.
6. Construction sees biggest wage hike in 40 years - hourly pay for contractors rose at the steepest pace in nearly 40 years, according to an analysis by Associated General Contractors of America (AGC) of government data last March.
Reports said average hourly earnings for production and nonsupervisory employees increased by 6% from February 2021 to February 2022. The industry average of $31.62 per hour for such workers exceeded the private sector average by 17%.
“All segments of construction added workers in February,” said Ken Simonson, the association’s chief economist. “However, filling positions remains a struggle, as pay is rising even faster in other sectors.”
5. Cement consumption to decline in 2023 for the first time in 13 years - The Portland Cement Association (PCA) predicted cement consumption to decline for the first time in over a decade as the U.S. economy struggles against rampant inflation and rising interest rates.
The PCA’s fall cement consumption forecast for the U.S. market projected a “near-term demand decline of 3.5%” for 2023. Growth is expected to return in 2024 and beyond, however.
Edward J. Sullivan, chief economist and senior vice president for the PCA, points to inflation and rising interest rates as the driving forces behind the drop in demand, as well as unemployment at 4.7%.
4. President Biden’s new policy could threaten opportunities for non-union contractors - Objections were raised by construction officials over President Joe Biden’s executive order implementing new pro-union project labor agreements in order to increase union membership in the federal, public and private sectors.
Opponents to the measure stated the move could affect contractors looking forward to new projects coming as a result of the $1.2-trillion Infrastructure Investment and Jobs Act (IIJA).
The new limitations were to be placed upon “large-scale construction contracts,” defined as a contract for which the estimated cost is $35 million or more.
3. Las Vegas gives Elon Musk the go-ahead for more tunnels - The Las Vegas City Council approved plans for Elon Musk’s The Boring Co. to build, own and
operate a system of underground tunnels beneath the Las Vegas Strip.
The network of vehicle tunnels would connect hotel casinos with the Las Vegas Convention Center, the city’s new football stadium and McCarran International Airport.
Dubbed the “Vegas Loop,” the tunnel system will allow passengers to get from place to place in Teslas via underground tunnels. The Boring Company already operates a small version of this “Teslas in Tunnels” system underneath the Las Vegas Convention Center, which opened in June of 2021.
2. Wacker Neuson to build mini excavators for Deere - Just months after ending its decades-long joint venture with Hitachi, John Deere turned to Germany-based Wacker Neuson for design and manufacturing of mini excavators under 9 tonnes for North America.
Under the new agreement, Wacker Neuson will manufacture machines under 5 tonnes for John Deere at its plants in Menomonee Falls, WI and in Linz, Austria. The 5- to 9-tonne excavators will be developed and manufactured by John Deere using designs acquired from Wacker Neuson.
The machines, including electric models, will be distributed under the John Deere brand through John Deere’s global dealer network. Wacker Neuson machines in the same range will continue to be distributed under the Wacker Neuson brand through its own network.
1. Researchers concur: 2023 will bring construction cost relief - Data showed stability may be returning to the cost of construction materials in the U.S., even amid an August forecast of slowing construction-input inflation.
At the time this story ran, construction inflation had a lot of momentum supported by supply-chain dysfunction, energy and labor cost increases.
The IHS Markit index, a leading indicator measuring wage and material inflation for the engineering, procurement and construction sector, fell to 76.7 in June from 79.1 in May. June’s reading was still well above the breakeven 50 mark, indicating rising prices.
The subcontractor labor index rose 3.3 points in to 89.1 from 85.8, while the sub-index for materials and equipment costs fell 4.8 points to 71.4.