We Are the World
Thomas C Schleifer, Ph.D.
The construction industry functions in a world economy beyond our national borders. The United States is the 2nd largest importer of building construction materials in the world, importing most of it from China, South Korea, and Germany.
According to construction industry experts, steel, concrete, and wood currently are the most sought-after materials with cement and steel experiencing the sharpest cost increases.
- Steel is particularly vulnerable in the US because Ukraine and Russia were two of the biggest steel exporters in the world. The demand for steel has rapidly increased because of a global increase in high rise construction.
- Over the past 18 months, there have been global timber shortages, but recently things appeared to have stabilized until sanctions placed on Belarus and Russia have seriously impacted birch plywood, OSB and pallet supplies.
- Many experts say the most in-demand construction materials by US construction companies are cork and cement. As sustainable, eco-friendly materials like bamboo and cork flooring became more popular they went into short supply.
- Total lumber imports primarily from Canada soared to almost $20 billion in 2022. We imported $840 million of sawn timber alone. Billions of board feet of softwood lumber were imported into the US from 48 foreign countries.
- US imports steel from: Canada (6 million T), Mexico (4 million T), Brazil (4 million T), South Korea (2.7 million T), and Russia (1.6 million T).
- A vast array of unnoticed but essential building materials constantly flows across our borders such as: granite countertops, strip steel in coils, arc and tempered glass, marble, porcelain and glazed tile, aluminum, valves, and particle board.
The above data illustrates that the U.S. construction industry is indeed a global industry. Therefore, world economics should play an important role in corporate planning, budgeting, and estimating. If construction CEOs and CFOs limit their analysis to domestic economics they will end up with an inaccurate perception of the impact of global inflation, supply chain interruption, and recession in supplier nations.
The construction industry’s outlook for labor is bleak. To meet demand, contractors will need to hire an estimated additional 546,000 workers in 2023, and that’s in addition to the industry’s normal pace of hiring, according to a new analysis by Associated Builders and Contractors. Where will these candidates come from?
Bureau of Labor Statistics Construction Profile
The entire national construction industry employed 7,940,000 people at the end of 2022. The Bureau of Labor Statistics categorizes construction employees as follows:
- Carpenters – 589,150
- Construction laborers – 847,050
- Construction managers – 243,980
- Electricians – 536,350
- Operating Engineers – 266,170
- Skilled laborers (no supervisory) – 5,842,000.
- 12.4% are currently represented by unions.
- There were 396,000 job openings at the end of 2022.
Construction workers have traditionally been well paid compared to other “blue collar” employment.
For the past 100 years, the robust nature of the U.S. construction industry, the number of jobs available, and the premium pay scale compared to other nations in our hemisphere has attracted hordes of skilled craftsmen from around the entire world. As far as the construction industry is concerned, much like agriculture, there should not be any difference between US immigration policies and import policies when it comes to skilled construction labor. The country should recognize that skilled construction craftsmen are as vital to our economy as doctors and software engineers.
We Are the World
Much like the famous 1985 song “We Are the World” proclaimed; the U.S. construction industry is a part of the larger global community. If we are to succeed in the long run our trading partners and foreign labor force will succeed along with us. We need to begin to understand that the construction industry is not in competition with our neighbors, we are in many ways in business with them. To accurately analyze our industry’s economics in the future, we will need to include an international perspective.
Next week we’ll return to our discussion on project selection.
For a broader view into growth, read more here: GROWTH
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