Archinect - News

Project Stress Index records 14.7% increase for November

2024-12-18T09:59:00-05:00

The Project Stress Index (PSI) composite closed November 2024 at 119.8, rising 14.7% from a revised October reading of 104.5.

Sharp increases in on-hold (29.4%) and abandonment (31.9%) activity drove the month-over-month increase. The month's reading is a new high for the PSI following its August 2024 low of 87.9. Conditions are 20% above the average 2021 level, and the composite remains more than 5% below the level from the start of the year.

ConstructionConnect's Chief Economist Michael Guckes noted: "Since the Federal Reserve began adjusting the Federal Funds Rate lower in mid-September, the PSI has made multiple drastic monthly moves, ranging from a 14% decline to a 17.6% increase."

Related on Archinect: November's construction input prices remain flat

"The election of President-elect Trump has brought with it many ideas and plans that could substantially shift the business landscape and impact both existing and prospective commercial real estate owners and developers."

"Until re...

What could Trump’s economic plans do for the cost of building green?

2024-11-25T16:46:00-05:00

Proposed tariffs by the incoming Trump administration may increase the prices of many items at the store. But for architects and advocates working on more efficient and sustainable buildings, there’s fear that tariffs could impact specific materials and machines that are key to their work. Higher costs from tariffs, some say, may slow down the pick up of these techniques of residential and commercial construction, and make such buildings more expensive and less attractive to build.

Firms could be hard put to keep pace with the cost of procuring materials like mass timber and products such as heat pumps after the proposed blanket tariffs are enacted, explains FastCompany. This would add stress and uncertainty to the already lagging American building industry, which is considered behind Europe as far as efforts to increase efficiency standards are concerned. Domestic manufacturing would have to rise to the challenge or risk falling back into the wrong kind of "American Exceptionalism" that is both environmentally unproductive and at odds with a global consensus on building sustainability.

Biden administration imposes 200% tariff on Russian aluminum imports

2023-03-01T11:55:00-05:00

The Biden administration issued another round of tariffs Friday on key industrial goods from Russia — including a 200% tariff on aluminum — as the country’s invasion of Ukraine crosses the one-year mark. Aluminum tariffs were announced in addition to $2.7 billion in new duties on many metals and raw materials from the country. The tariff rates on most metals and metal products will double from 35% to 70% beginning April, and target “a crucial revenue generating sector of the Russian economy”

Russia is behind China and India the world’s third-largest producer of aluminum and ranks fifth overall in terms of imports of the metal into the United States.

Architects and builders have only recently come out from under 25% steel and aluminum tariffs imposed on certain countries by the Trump administration for reasons of “national security” (e.g. economic protectionism).

The tariffs will go into effect on March 10th. White House officials also cited an increase in Russian aluminum imports through much of last year.

President Biden invokes Defense Production Act to stimulate domestic clean energy construction

2022-06-08T17:33:00-04:00

President Joe Biden is using his executive powers Monday to boost the domestic production of solar panels and their parts and will issue a 24-month tariff exemption on imports of the products from several countries. The White House said Biden will authorize the use of the Defense Production Act to accelerate manufacturing of solar panels in the United States as a way to strengthen the administration's efforts to shift the country toward clean energy.

Invoking the Defense Production Act (DPA) allows the President to order private businesses to prioritize the production of materials deemed necessary for national defense. Aside from accelerating the domestic production of solar panels, Biden is using the Act to rapidly expand American manufacturing of building insulation, heat pumps for buildings, equipment for making and using clean electricity-generated fuels, and critical power grid infrastructure.

Previously on Archinect: U.S. Department of Energy says solar energy has the potential to produce 40% of the nation's electricity by 2035

The White House also signaled its intention to direct the development of master supply agreements to increase the speed and efficiency by which domestic clean electricity providers can sell their products to the U.S. Government.

Furthermore, this move includes an order to establish a two-year tariff exemption for solar panel imports from Cambodia, Malaysia, Thailand, and Vietnam in order to meet th...

U.S. could double tariffs on Canadian lumber, despite soaring timber prices

2021-05-31T13:04:00-04:00

The U.S. Commerce Department has released a report concluding that the United States must double its tariff on Canadian softwood lumber, raising the figure from 9% to 18%. As reported by Fortune, the increase would seek to combat alleged unfair Canadian trade practices, where lumber production is subsidized by the Canadian government.

Canadian softwood lumber accounts for over 25% of all softwood lumber used in the U.S. construction sector. A doubling of tariffs on imports would further compound the major increase in construction timber prices across the United States, which have risen 323% since April 2020 and now sit at an all-time high.

As we detailed last week, timber prices are one of several factors currently exacerbating America’s housing shortage, where inflated costs have added an average of $36,000 in expenses to each new development. The current disruption to material supply chains caused by the COVID-19 pandemic may take between 18 months and two years to fully resol...

Trump shifts steel tariffs from raw materials to products like nails, staples, and cables

2020-01-27T18:20:00-05:00

Imports of steel and aluminum into the United States have declined since the tariffs went into place, he said, but imports of products made with those metals had “significantly increased.” [...] As a result, [President Trump] said, the United States will expand its tariffs to cover products made of steel and aluminum — like nails, tacks, staples, cables, certain types of wire, and bumpers and other parts for cars and tractors — as of Feb. 8.

The New York Times reports that the cost of foreign-made steel products like nails, staples, and cables will go up next month as President Donald Trump moves to reconfigure his unsuccessful efforts to protect these industries from foreign competition. Up until now, the tariffs have applied to raw materials imported from foreign countries, a situation that has negatively impacted the American manufacturers that rely on these raw materials to produce goods in the US to then sell globally. Moving forward, foreign-made goods will instead be taxed, allowing American manufacturers to resume importing raw materials for their manufactured goods at conventional costs.

Economists like Chad Bown, a senior fellow at the Peterson Institute for International Economics, tell The New York Times that the failure of the initial approach and the resulting shift in tariff strategy represents a classic case of “cascading protectionism” that, according to textbook definitions of modern economic thinking...

Europe considers imposing "carbon tariffs" on climate dawdling nations

2019-12-13T19:14:00-05:00

Potential carbon tariffs have been an active topic at the United Nations climate conference that wraps up this weekend in Madrid, where nearly 200 nations have been at odds over how to counter the continued global rise of greenhouse gas emissions. And some diplomats say it’s inevitable that governments will turn to trade barriers in the effort to fight climate change.

Politico reports that as international cooperation toward achieving global carbon reduction goals falters in the face of a climate change-denying American presidential administration, European countries are considering implementing carbon tariffs on imported goods to force a change.

The United States recently moved to exit the landmark Paris Agreement.

Speaking to climate-denying countries in a statement to Politico, European Executive Vice President Frans Timmermans struck a combative tone, saying, "If you take the same, or comparable, measures there will be no need to correct anything at the border," adding, “If you don’t, then of course, at some point we will have to protect our industries.”

Labor Department: Manufacturing and construction job growth sags in 2019

2019-08-05T13:31:00-04:00

In particular, the new numbers confirm that there is a major slowdown underway in the creation of jobs making things: manufacturing, mining and construction. Those “goods-producing” sectors, as Labor Department classifications call them, added an average of 58,000 jobs a month in 2018. That is now down to 23,000 a month thus far in 2019 — and a mere 15,000 in July.

The New York Times reports that as most economic figures remain steady, a look at some of the "fine print" of recent economic data might be cause for concern, particularly within the manufacturing and construction sectors, which are seeing lagging job growth.

According to The New York Times, recent United States Labor Department figures indicate that a softening housing market and sagging investment in new construction have reduced the number of new construction jobs by 75-percent over the last year. Slowing growth has also hit the manufacturing sector, which is producing half as many jobs in 2019 as in 2018.

Trump threatens to tax all Chinese-produced goods

2019-08-02T12:58:00-04:00

According to The Wall Street Journal, President Donald Trump is moving to escalate America's trade war with China by imposing new tariffs on all Chinese-made products imported into the country.

Currently, the administration's tariff-loving trade policy has been limited mostly to industrial goods—one of several reasons why construction costs have escalated drastically over the last few years. According to The Wall Street Journal, President Trump said, “If they don’t want to trade with us anymore, that would be fine with me."

Myron Brilliant, head of international affairs at the United States Chamber of Commerce told The Wall Street Journal, “Tariffs are not the answer, escalation is not the answer. We have to be careful about actions undertaken by either government that would stir the pot and not create the best atmosphere for getting these complicated talks back on track.”

As the American Institute of Architects (AIA) indicated recently in an economic forecast for the coming 18 mon...

Despite Trump's damaging tariffs, AIA forecasts continued economic growth in nonresidential construction into 2020

2019-07-22T14:49:00-04:00

Despite recent warnings from the American Institute of Architects (AIA) of weakening billings numbers among architecture firms, the organization continues to forecast positive economic growth for the construction industry into 2020, with several caveats.

According to AIA's Consensus Construction Forecast, nonresidential construction is poised to grow 3.8-percent this year and 2.4-percent next year over 2018's activity. That relative growth will be led, according to the forecast, by gains in the industrial, educational, public safety, and office sectors.

The Consensus Construction Forecast, July 2019. Image via aia.org.

In a summary of the forecast, AIA chief economist Kermit Baker initially sounds a cautiously optimistic note, saying that the “outlook showing nonresidential construction activity continuing to expand reflects the underlying strength of the economy, even this late in the business cycle.”

But there are concerns for where the economy is headed overall, according to th...

Construction equipment manufacturers 'extremely disappointed' with Trump's tariffs

2018-06-18T14:33:00-04:00

The American Association of Equipment Manufacturers (AEM) has criticised the Trump Administration over the introduction of 25% tariffs on $50bn of Chinese imports. Chinese goods affected include types of construction and agricultural equipment. [...] Since Trump’s trade announcement on Friday, China has said it will impose a similar 25% tariff, also worth $50bn.

"We’re extremely disappointed with the Trump administration’s decision to move forward with these harmful tariffs," said Association of Equipment Manufacturers (AEM) President Dennis Slater in a statement last Friday. "This move jeopardizes many of the 1.3 million good-paying manufacturing jobs our industry supports. The expected retaliatory actions by China also raise costs for equipment manufacturers that rely on a vast supply chain around the world, further eroding the benefits of the recent tax reform. We will continue to fight to end these tariffs immediately."

The latest round of tariffs imposed by the Trump administration on a variety of goods imported from China comes on the heels of steel and aluminum tariffs that went into effect on March 23, 2018.

Need an explainer on how the 25% steel tariff could affect the construction cost of your architectural project? Nick Butcher, Cost/Risk Group Managing Director at MGAC, put it into context for us.

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The Steel Tariff and Construction Cost: Putting It Into Context

2018-04-06T19:28:00-04:00

On March 8, 2018, President Trump signed an order to place a 25% and 10% tariff on steel and aluminum imports, respectively, effective March 23, 2018. The new tariff granted a temporary exemption to certain countries including Canada, Mexico, Argentina, Australia, Brazil, South Korea, and the European Union until May 1, 2018, as discussions continue.

Now that the steel tariffs are in place, the question everyone is asking is “What does this mean to the cost of my construction project?” While this is a straightforward question, the answer may not be as simple.

US Steel Import Volume

The United States is the world’s largest importer of steel, importing approximately 35 million metric tons in 2017, which accounted for 33% of the total steel used in the country.

Nearly 60% of steel imported into the US originates from only 5 countries

Nearly 60% of this total imported volume originates from five countries, including Canada and Mexico which alone accounted for 25% of the total imported v...