Archinect - News

Construction starts rise 5% in November, led by booming nonbuilding market

2024-12-19T14:55:00-05:00

The total number of construction starts increased by 5% in November to a seasonally adjusted annual rate of $1.2 trillion. According to Dodge Construction Network, nonresidential building starts grew by 2%, nonbuilding starts were 16% high, and residential starts fell by 1%.

For the 12 months ending November 2024, total construction starts were up 4% from the 12 months ending November 2023. Residential starts were up 7%, nonresidential starts were up 2%, and nonbuilding starts rose 4% over the same period. The number of manufacturing starts was down 52%.

"Construction starts continue to move sideways as the market waits for further rate cuts," Richard Branch, the chief economist of Dodge Construction Network, stated. "Elevated interest rates, labor shortages, and strict lending standards will continue to constrain construction activity in the near term."

The largest nonbuilding proj...

November's AIA/Deltek Architecture Billings Index nearly flat for second month in a row

2024-12-18T12:54:00-05:00

The latest AIA/Deltek Architecture Billings Index (ABI) for November has recorded a second consecutive flat reading. The slight decrease to 49.6 indicates a near-equal balance between the number of firms experiencing a decrease in billings versus those seeing increases. Inquiries into new work continued to grow, while the value of newly signed design contracts declined for the eighth month in a row.

"Given the extended weakness in business conditions at architecture firms, increasing firm profitability remains the top concern for 2025, with one-third of firm leaders selecting it as a major issue—the highest since 2017," Kermit Baker, the AIA's Chief Economist, said in a statement.

"Negotiating appropriate project fees ranked second, chosen by 21 percent, while 20 percent identified finding new clients and markets or improving business planning and marketing as a top concern, up from 18 percent last year," his statement continued.

Related on Archinect: Architecture Business Metrics ...

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...

November's construction input prices remain flat

2024-12-12T13:08:00-05:00

The Associated Builders and Contractors (ABC) has released its latest analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data for the month of November. The Index remained unchanged as inputs to nonresidential construction gained 0.1%.

Overall construction input prices are now 0.5% higher than they were a year ago, whereas nonresidential construction input prices are 0.3% higher. Prices for concrete products, steel mill products, softwood lumber, and wood products all increased.

Chart credit: Associated Builders and Contractors

"Construction input prices are up just 0.2% through the first 11 months of 2024," ABC Chief Economist Anirban Basu said. "However, that encouraging year-to-date price growth primarily reflects declining energy prices and obscures price escalation that has occurred for specific materials. Prices for copper wire and cable and softwood lumber, for instance, are up nearly 12% year over year."

Chart credit: Associated Builders and Contractors

"Whi...

2024's Data Center boom on pace to equal $180 billion

2024-12-06T14:49:00-05:00

The data-driven economy has spoken, and AEC firms are taking note to the tune of a projected $180 billion worth of new construction spending on data center projects as of the end of Q3 this year. The figure comes from a Dell’Oro Group report, which also pointed out just three companies—AWS, Azure, and Google Cloud—were responsible for 80% of Q3’s spending. Model training for AI is seen as a driving force. The numbers are reflected in the two latest Dodge Momentum Index reports. (h/t Construction Dive)

Dodge Momentum Index falls 2.3% in November

2024-12-06T13:01:00-05:00

The new Dodge Momentum Index (DMI) for the month of November decreased by 2.3% to a new score of 191.5 from the revised October reading of 196.0. Over the month, commercial planning was down 4.6% while institutional planning improved by 2.5%.

The November DMI is 12% higher than year-ago levels. The commercial segment was up 13% from November 2023, while the institutional segment was up 8% over the same period.

The DCN also shares: "The influence of data centers on the DMI this year has been substantial. If we remove all data center projects in 2023 and 2024, commercial planning would be down 6% from year-ago levels, and the entire DMI would be down 1%."

Sarah Martin, the associate director of forecasting at Dodge Construction Network, stated: "Throughout 2024, we’ve seen robust growth in nonresidential planning activity – but labor shortages and high construction costs have prevented those projects from moving through the planning process at a normal pace. The current backlog may...

Hurricanes fueled decline in construction spending last month

2024-12-03T10:49:00-05:00

Nationwide nonresidential construction spending decreased by 0.4% in the month of October, according to an Associated Builders and Contractors (ABC) analysis of recent U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.228 trillion.

October’s spending declined in 11 of 16 nonresidential subcategories. For the private nonresidential sector, spending decreased by 0.3% while public nonresidential construction spending declined by 0.5%.

Table credit: Associated Builders and Contractors

“Some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton,” ABC Chief Economist Anirban Basu said about the figures. “The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%....

Construction starts rise 4% in October, led by gains in nonresidential projects

2024-11-22T16:09:00-05:00

The total number of construction starts increased by 4% in October to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge Construction Network’s latest Construction Starts Index. Nonresidential building starts rose 14%, nonbuilding starts grew by 2%, while residential building starts fell 3%.

On a year-to-date basis through October, total construction starts were up 3% from the same period in 2023. Residential starts were up 7%, nonresidential buildings rose 1%, and nonbuilding starts ticked up by less than one percent. For the 12 months ending October 2024, total construction starts were up 1% from the 12 months ending October 2023. Residential starts were up 6%, and nonresidential and nonbuilding starts were each down 1%.

“Construction starts have yet to see the impact of falling interest rates,” said Dodge Construction Network chief economist Richard Branch. “Several more rate cuts will be needed to start moving construction projects through the planning proce...

AIA/Deltek Architecture Billings Index remains flat in October, ending 20-month streak of declines

2024-11-20T12:31:00-05:00

The new AIA/Deltek Architecture Billings Index (ABI) for the month of October has recorded a flat (50.3) reading, ending its 20-month streak of consecutive declines. This score indicates a balance between the number of firms experiencing a decrease in billings and those seeing an increase, according to the AIA. Inquiries into new projects in October also picked up to their highest level in six months.

"Billings finally stabilized this month, and firms are feeling more optimistic about revenue projections for 2025," said the AIA's Chief Economist, Kermit Baker. "Overall, 41 percent of responding firm leaders expect to see net revenue growth from 2024 to 2025, with 32 percent projecting growth in the 5 percent to 9 percent range."

October ABI Highlights

Regional averages: Northeast (45.6); South (52.1); Midwest (46.9); West (47.6)
Sector index breakdown: institutional (50.5); multifamily residential (45.6); commercial/industrial (47.0); mixed practice (48.0)
Project inquiries index: 54...

Project Stress Index records slight improvements after September interest rate cuts

2024-11-15T14:45:00-05:00

The new ConstructionConnect Project Stress Index (PSI) composite reading for October has shown a mild improvement to 104.2, rising 0.8% for the month after a revised September reading of 103.4.

Compared to the same month one year ago, the composite is down 11.6%. This is the fourth consecutive month in a row for year-to-year contractions. However, ConstructionConnect's Chief Economist Michael Guckes tells us: "This year has been very good for the PSI, with year-to-date composite performance down 14.6%. If conditions continue at this level for the rest of the year, the PSI will arguably have its best year since 2021."

The total number of project abandonments, along with the number of on-hold projects, were both recorded as hitting new multi-year lows. Guckes says it is due largely to the preemptive anticipation of Federal Funds Rate (FFR) decreases, which have an impact of pr...

Construction input prices rise 0.3% in October, led by increased energy costs

2024-11-14T14:19:00-05:00

A new report by the Associated Builders and Contractors (ABC), analyzing the U.S. Bureau of Labor Statistics’ Producer Price Index data has revealed that construction input prices increased 0.3% in October. Nonresidential construction input prices also increased 0.3% for the month.

Last month, prices in all three energy subcategories increased. Natural gas prices increased by 29.3%, unprocessed energy materials prices rose 9.9%, and crude petroleum prices went up by 7.3%. Overall, construction input prices are 0.2% lower than they were a year ago, and nonresidential construction input prices are 0.5% lower.

Chart credit: Associated Builders and Contractors

“Higher energy prices drove the increase in construction input prices observed in October,” said ABC Chief Economist Anirban Basu. “While prices for a few other materials, like concrete and copper products, also rose for the month, overall input prices are lower than they were one year ago and have fallen 5% since reaching an all-t...

New reporting offers a snapshot on AI usage within the AEC industry

2024-11-13T14:13:00-05:00

A new survey from Bluebeam has documented the widespread use of AI technology in every facet of the AEC industry.

According to their survey of management employees in seven countries, around three-quarters (74%) of all businesses have implemented AI into their workflows. This is especially true in the design and planning stages of projects. It’s worth noting, however, that only 11% of responses came from architecture firms. Of the others, 71% are construction and 18% are engineering firms.

In the way of a broader adoption of digitalization and AI stands a lack of training amongst staff, which, at 32%, was the highest tallied reason ahead of general resistance to change within organizations (26%), concerns about data privacy (22%), budget constraints (19%), and other issues.

Related on Archinect: AI is Good For Architects (For Now)

Also in terms of budgeting, the highest number of responses (40%) to a query said they are currently allocating between 11% and 25% of their IT resources ...

October's Dodge Momentum Index down 5.3% due to commercial sector losses

2024-11-07T15:36:00-05:00

The new Dodge Momentum Index (DMI) for the month of October has shown a decrease of 5.3% to a new score of 197.2. This is down from September’s revised reading of 208.2. Over the month, commercial planning fell 6.7%, and institutional planning declined 2.0%.

The declines were reflected in most commercial planning categories with hotels serving as the sole outlier. Education and public planning activity expanded the institutional side, which was offset slightly by weaker activity in healthcare, recreational, and religious projects. Overall, the DMI was 13% higher than in October of 2023.

"In addition to data center planning normalizing, a moderate pullback in the number of planning projects for several other nonresidential sectors also contributed to the decline in the Dodge Momentum Index for October," Sarah Martin, the associate director of forecasting at Dodge Construction Network, said. "Regardless, owners and developers remain confident in next year’s market conditions, and t...

September nonresidential construction spending bumped by 0.1%, led by infrastructure investments

2024-11-01T15:04:00-04:00

Nationwide nonresidential construction spending increased by 0.1% in the month of September, according to an Associated Builders and Contractors (ABC) analysis of recent U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.22 trillion.

September's pending went up in half of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.1%, while public nonresidential construction spending was up 0.4% in September.

Table credit: Associated Builders and Contractors

“Construction spending inched higher in September, with growth fueled by ongoing infrastructure investment,” ABC Chief Economist Anirban Basu said. “Spending accelerated in several publicly funded segments in September, including highway and street, sewage and waste disposal and water supply. The privately funded nonresidential construction segment didn’t perform as well for the month, with spending in that segment contracting for the second time in the past...

In a downturn, manage your clients, people, and cash, says former HOK CEO

2024-10-24T08:25:00-04:00

As Archinect reported earlier this week, the latest AIA/Deltek Architecture Billings Index shows that U.S. architectural business conditions remain turbulent. Billings have declined at firms for over one and a half years, according to the index, while our monthly Archinect State of AEC series has noted that the challenging conditions are spread across all U.S. geographical regions.

To find out how architects, particularly firm owners, can navigate the current downturn, we recently spoke with former HOK CEO and Chairman Patrick MacLeamy on the subject. Through his long career at HOK, and his book Designing a World-Class Architecture Firm: The People, Stories, and Strategies Behind HOK, MacLeamy has accumulated a wealth of knowledge on how firms can survive poor economic conditions.

As our feature article shows, a majority of MacLeamy’s advice for firms take place long before a downturn hits, underscoring the need for architects to adhere to healthy practice management principles so t...

Architecture business conditions worsened in September, says AIA/Deltek Architecture Billings Index

2024-10-23T11:47:00-04:00

The latest AIA/Deltek Architecture Billings Index has shown a continued decline in billings through last month. The September ABI remains at 45.7, where it also sat in August. Any score below 50.0 indicates a decline. The findings mark the twentieth consecutive month of declines in the ABI index.

“Despite recently announced rate cuts by the Federal Reserve, clients are still cautious about future projects,” the AIA notes about the latest figures. “Inquiries into potential new projects continued to increase, but the pace has slowed since the beginning of the year. And the value of newly signed design contracts at firms decreased for the sixth consecutive month in September, although the pace of that decline has moderated somewhat over the last few months.”

“However, firms continue to report average backlogs of 6.4 months, which remains above pre-pandemic historical averages and is a good indicator of existing work in the pipeline, even if new work coming in has slowed,” the AIA adds...

Construction starts fall 6% in September, following two consecutive months of gains

2024-10-18T14:58:00-04:00

The total number of construction starts fell by 6% in September, resulting in a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network’s latest Construction Starts Index. Nonbuilding starts fell 11%, residential starts decreased by 1%, and nonresidential building starts were down 6%.

On a year-to-date basis through September, total construction starts were up 2% from the same period in 2023. Residential starts were up 7%, nonresidential buildings rose 2%, and nonbuilding starts fell 3%. For the 12 months ending September 2024, total construction starts were up 1% from the 12 months ending September 2023. Residential starts were up 6%, nonresidential building starts were unchanged, and nonbuilding starts decreased by 4% on a 12-month rolling sum basis.

“Construction starts are treading water,” said Dodge Construction Network chief economist, Richard Branch. “September’s rate cut was just the first step in unwinding a period of high rates and severa...

Construction Input Prices drop 0.9% in September

2024-10-11T14:34:00-04:00

A new analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data from the Associated Builders and Contractors (ABC) has show construction input to have decreased by 0.9% for the month of September. Nonresidential construction input prices also decreased 0.9% for the month.

Prices of concrete products were up 0.3% and steel miil products went down 1.3%. Gypsum products also rose 0.6% in September. Overall construction input prices are now 1.9% lower than a year ago, while nonresidential construction input prices are 2.1% lower.

Chart credit: Associated Builders and Contractors

"The decline in construction input costs observed in September was almost entirely due to a large decrease in oil prices," ABC Chief Economist Anirban Basu said. 'Certain materials, like gypsum, fabricated structural-metal products, asphalt and lumber exhibited sizable price increases for the month."

Chart credit: Associated Builders and Contractors

"While domestic freight rates are low by historical ...

September's Dodge Momentum Index drops 4% following three straight months of growth

2024-10-07T17:40:00-04:00

The latest Dodge Momentum Index (DMI) figures for September have shown decreases equal to a 4% drop to a new sore of 208.6 after a revised August reading of 217.7.

For the month, commercial planning contracted by 7.8% and institutional planning improved by 5.2%. The new DMI was 21% higher than in September of 2023. Planning in the commercial segment was up 31% from year-ago levels, while the institutional sector was up 4% over the same period.

"Despite this month’s decline, the Dodge Momentum Index remains at very robust levels," Sarah Martin, the associate director of forecasting at the Dodge Construction Network said in a statement. "A surge in data center activity drove much of the recent rapid growth in the DMI – so as planning for that sector moderated over the month, overall commercial planning fell back. By mid-2025, the Fed’s rate cuts should spur planning projects to reach groundbreaking more quickly – leading to stronger nonresidential activity as 2025 progresses."

The l...

Nonresidential construction spending jumps 0.1% for August

2024-10-01T13:54:00-04:00

The latest Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data on nonresidential construction spending has shown a slight 0.1% increase for the month of August.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.22 trillion. Private nonresidential spending decreased 0.1%, while public nonresidential construction spending was up by 0.3%.

"Nonresidential construction spending inched higher in August, and that’s almost entirely due to ongoing infrastructure investments," said ABC Chief Economist Anirban Basu.

Table credit: Associated Builders and Contractors

"Public spending accounted for all of the nonresidential segment’s monthly increase and has risen nearly 8% over the past year, significantly outpacing privately financed nonresidential construction activity," Basu's statement continued. "As a result of ongoing weakness in certain private subsegments, ABC’s Construction Backlog Indicator has fallen by a full month over the past y...

Construction starts rise 6% in August, San Francisco International Airport T3 expansion leads with the highest project value

2024-09-24T14:19:00-04:00

The number of construction starts nationwide climbed 6% to a seasonally adjusted rate of $1.2 trillion in August, according to the latest data from the Dodge Construction Network (DCN). For the month, residential starts rose 5%, nonbuilding starts were up by 17%, and nonresidential buildings fell by 2%.

On a year-to-date basis through August, total construction starts were up 4% from the first eight months of 2023. Residential starts were up 8%, nonresidential buildings 3%. Total nonbuilding starts were down 1%. The total number of construction starts was up 2% from the 12 months ending August 2023. Residential starts were up 6% compared to the same year, while nonresidential building and nonbuilding starts each went up by 1% on a 12-month rolling sum basis.

"Construction starts continue to move forward at a modest pace," DCN chief economist Richard Branch said. "Now that the Federal Reserve has begun to lower rates the construction sector should begin to feel relief. The Dodge M...

AIA/Deltek Architecture Billings Index drops again in August for 19th consecutive month

2024-09-18T12:10:00-04:00

The newest AIA/Deltek Architecture Billings Index reporting has shown a continued stasis of weak conditions for firms nationally. The August ABI is now 45.7, down from the 48.2 figure that was recorded for July (any score below 50.0 indicates a decline). This is now the nineteenth consecutive month of declines in the ABI index.

"Unfortunately, even the impending interest rate cuts didn’t move the needle on project inquiries or new design contracts at architecture firms. Hopefully, once the trajectory of further cuts gets clarified, delayed projects will restart, and new projects will gather momentum," the AIA’s Chief Economist Kermit Baker says of the findings:

August ABI Highlights

Regional averages: Northeast (48.2); South (46.8); Midwest (46.6); West (45.7)
Sector index breakdown: mixed practice (firms that do not have at least half of their billings in any one other category) (48.6); institutional (47.4); commercial/industrial (46.6); multifamily residential (44.0)
Project inqui...

Construction input prices tick up by 0.1% in August

2024-09-13T10:45:00-04:00

Construction input prices increased slightly by 0.1% in August, according to a recent Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data.

Nonresidential construction input prices increased 0.2% for the month. Overall construction input prices are now 0.7% lower than they were a year ago, while nonresidential construction input prices are down by 0.9%.

Chart credit: Associated Builders and Contractors

“Construction input prices are now down almost a full percentage point over the past year,” ABC Chief Economist Anirban Basu said. “This is a welcome development for contractors, a plurality of whom now expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index. Moderating materials price escalation, along with easing labor constraints and the near certainty that the Federal Reserve will begin lowering interest rates at its next meeting, should provide some relief to con...

Dodge Momentum Index continues to climb with 2.9% jump in August

2024-09-11T11:00:00-04:00

The Dodge Momentum Index (DMI) for August reports a 2.9% increase to a new score of 220.4 following July’s revised total of 214.2. Over the month, commercial planning expanded by 1.9%, and institutional planning was up another 5.7%.

"Owners and developers continued to prime the planning queue in August, ahead of next year’s anticipated stronger market conditions," Sarah Martin, the associate director of forecasting at Dodge Construction Network, said. "With the Fed’s September rate cut all but finalized, the influence of selective lending standards and inflation should moderate next year, alongside a modest upgrade to consumer demand. As a result, stronger planning activity was widespread in August, with most nonresidential sectors seeing growth."

The commercial planning sector was led again by data center and warehouse projects, while on the institutional side, healthcare projects continued to be a primary driver.

Related on Archinect: Architecture's Interest Rate Prayers Answer...

Nonresidential construction spending drops 0.2% in July

2024-09-03T14:51:00-04:00

Nonresidential construction spending for July fell slightly by 0.2%, according to the latest Associated Builders and Contractors analysis of U.S. Census Bureau data published today.

On a seasonally adjusted annualized basis, nonresidential spending is now worth a total of $1.21 trillion. Private nonresidential spending decreased by 0.4%, while public nonresidential construction spending was up 0.2% in July.

Table credit: Associated Builders and Contractors

"Nonresidential construction spending declined for the second consecutive month in July but remains just 0.4% below the all-time high established in May," stated ABC Chief Economist Anirban Basu. "While Hurricane Beryl, which interrupted construction activity along the Gulf Coast in early July, contributed to the month’s weak construction spending data, the cumulative effect of high interest rates likely bears more blame. This is particularly true for nonresidential spending in the private sector, which fell 0.4% for the month and ...

Construction starts rise 10% in July, propelled by gains in nonresidential building and infrastructure

2024-08-26T13:03:00-04:00

Construction starts have risen 10% for the month of July to a new seasonally-adjusted rate of $1.1 trillion, according to the latest data published by Dodge Construction Network (DCN). For the month, nonresidential buildings rose 25% and infrastructure starts were shown to increase by 19% as starts in the residential construction sector fell by 8%.

This reverses June’s 19% decline. On a year-to-date basis through the end of July, total construction starts were up 6% from the first seven months of 2023. Residential starts rose 11%, nonresidential buildings were up by 5%, and starts for nonbuildings remained flat.

For the 12 months ending July 2024, total construction starts were up 3% from the 12 months ending July 2023. Nonresidential building starts were down 1%, residential starts were up 7%, and nonbuilding starts were up 5% on a 12-month rolling sum basis.

“Construction starts show...

July's Architecture Billings Index remains depressed as decline rates slow

2024-08-21T11:56:00-04:00

The latest AIA/Deltek Architecture Billings Index (ABI) for July has shown a continued state of soft business conditions at firms across the country, with a score of 48.2. This constitutes fewer reported declines and a minor improvement over June’s score of 46.4. Contracts decreased for the fourth consecutive month while, conversely, the rate of decline has slowed. The AIA notes that inquiries into new projects have also increased, albeit at a continued slow pace.

"Architecture firms continue to face a billings slowdown,” Kermit Baker, the Chief Economist for the AIA, states. “However, the emerging prospects of lower interest rates coupled with a modest uptick in project inquiries suggest that some dormant projects may be revived in the coming months.”

The question of interest rates factored heavily into our recent Archinect Business Survey. Notably, firms in the Northeast U.S. experienced sta...

July sees sharp improvement in project conditions as interest rates are expected to fall

2024-08-19T16:29:00-04:00

ConstructConnect’s Project Stress Index reading for July has experienced a sharp decline of 14.2% and is now at 96.2, following June’s revised reading of 112.5. Compared to levels from a year ago, the Index has fallen 6.1%.

Last month saw decreases across all stress components, with abandonment activity experiencing the most severe monthly decline, which was a 24% fall. This was followed by an 11% dip in on-hold activity and delayed bid activity, which fell 6.8%.

ConstructConnect attributes the abrupt and steep shift to an anticipated reduction of interest rates by the Federal Reserve.

As said by ConstructConnect Chief Economist Michael Guckes, “If owners and developers believe they need only wait a few more weeks—or just a few months at worst—for lower interest rates, then they would be correct in thinking that now is not the time to abandon or put projects on hold. Why abandon a project now if, in just a few weeks, falling commercial real estate mortgage rates will make that proje...

Construction input prices up again by 0.4% in July

2024-08-14T15:17:00-04:00

Nationwide, construction input prices increased by 0.4% in July, according to a new analysis of the U.S. Bureau of Labor Statistics Producer Price Index by Associated Builders and Contractors (ABC). Nonresidential construction input prices also increased 0.4% for the month. Overall, construction input prices are 1.1% higher than they were a year ago, and nonresidential construction input prices are another 0.8% higher.

This ends a two-month streak of consecutive declines following six straight months of increases to begin 2024. "Despite the monthly uptick, which was largely driven by higher petroleum and natural gas prices, input prices are up just 1.1% year over year," ABC Chief Economist Anirban Basu stated.

Chart credit: Associated Builders and Contractors

"The lack of materials price escalation over the past 12 months is a welcome development for contractors, just 34% of whom expect their profit margins to expand over the next six months, according to ABC’s Construction Confidenc...

Hotel construction is at an all-time high, new report states

2024-08-08T12:44:00-04:00

The hospitality industry group Lodging Econometrics has released its new prospectus of hotel projects in the construction and planning pipelines, indicating a new all-time high for the growing sector. At the end of Q2, 1,171 projects were reportedly under construction across the U.S. Another 2,350 projects are expected to start construction in the next 12 months, and 250 were reported to have opened in the first two quarters of 2024 alone.

The group also "expects that as interest rates begin to decline, projects scheduled to start in the next 12 months will move to under construction rather quickly." This may be a good sign for nonresidential and non-commercial projects in different markets, as the Construction Starts Index has experienced considerable volatility for over a year.

Looking forward, the new report states: "The LE forecast for the remainder of 2024 includes the ope...