Need a quick recap of what leading associations are reporting in terms of construction stats? We've got you. Read a summary of what three industry organizations are reporting in construction activity from December 2020 below, and click the links at the end of each section for an extended version of each news item.
Dodge Data and Analytics reported total construction starts lost 5% in December, falling to a seasonally adjusted annual rate of $784.3 billion. Nonresidential building starts fell 11% during the month, while nonbuilding starts were 5% lower.
Residential starts were essentially flat over the month. Starts were lower in three of the four regions in December; the South Central region was the only one to post an increase.
For the full year, total construction starts fell 10% to $766.3 billion. Nonresidential building starts saw the steepest drop, losing 24%, while nonbuilding starts fell 14%. Residential construction starts ended 2020 up 4% thanks to strong single family activity. In December, the Dodge Index fell 5% to 166 from the 174 reading in November. For the full year, the Dodge Index averaged 163, a 10% decline from 2019’s average.
“The roller coaster year of 2020 is over, but not forgotten,” said Richard Branch, chief economist for Dodge Data & Analytics. “The scars from the pandemic and recession will be long lasting and resulted in significant declines across most construction sectors. Single family housing, warehouse, and highway and bridge starts were bright spots that cannot be understated for their gains. There will be difficult months ahead for the economy and for construction starts as COVID-19 cases mount. However, the continued roll out of vaccines means 2021 will be a better year.”
Construction input prices increased 1.8% in December 2020 compared to the previous month, according to an Associated Builders and Contractors analysis of the United States Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices rose 2.1% for the month.
Construction input prices expanded 2.7% between December 2019 and December 2020. Nonresidential construction input prices experienced a 2.4% increase during that period.
The largest monthly increase in materials prices was registered in crude petroleum, up 17.5% for the month, followed by softwood lumber, which rose 12.2%. The largest decrease was in the price of natural gas, which fell 9.4%.
“A growing number of nonresidential contractors are expressing concern regarding a spike in materials prices expected later this year,” said ABC Chief Economist Anirban Basu. “They are right to be concerned. After a period of low commodity prices and truncated supply, the global economy will eventually enter a post-pandemic world, fueling demand for materials and potentially driving prices higher. According to ABC’s Construction Confidence Index, contractors expect profit margins to decrease over the next six months despite general optimism regarding sales.
The American Institute of Architects reported a dip in architecture billings for December, dropping from 46.3 to 42.6 month over month.
The pace of decline during December accelerated from November, posting an Architecture Billings Index (ABI) score of 42.6 from 46.3.
Meanwhile, the pace of growth of inquiries into new projects remained flat from November to December with a score of 52.4, though the value of new design contracts stayed in negative territory with a score of 48.5.
“Since the national economic recovery appears to have stalled, architecture firms are entering 2021 facing a continued sluggish design market,” said AIA Chief Economist Kermit Baker, Ph.D, Hon. AIA. “However, the recently passed federal stimulus funding should help shore up the economy in the short-term, and hopefully by later this year there should be relief as COVID-19 vaccinations become more widespread. Recent project inquiries from prospective and former clients have been positive, suggesting that new work may begin picking up as we move into the spring and summer months.”