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Quarterly Economic Report for the Construction Industry

Quarterly Economic Report for the Construction Industry

CICPAC (Construction Industry CPAs and Consultants) Releases Quarterly Economic Report for Q2 2023

The Report Covers a Variety of Economic Indicators:

  • Real GDP
  • Raw Material Prices/Availability
  • Labor Situation/Labor Costs
  • Manufacturing Materials
  • Recession Risks
  • Macroeconomic Viewpoints
  • Residential Construction
  • Nonresidential Construction
  • Banking Credit and Finance

Here is a sample of some of the insights included in the report:

Labor Situation/Labor Costs

The construction sector Employment Cost Index showed that overall labor costs continue to be at or near all‐time highs. The latest data available from Q4 still shows it trending 1.4% higher quarter‐over‐quarter and it was 4.8% higher versus Q4 a year ago.

Job openings in the construction sector were also still elevated at 248,000 through January of 2023. This was down significantly versus the peak hit last year - down 49.2% month-over‐month and down 37.4% year‐over‐year.

This was a significant drop in openings (driven by the drop in single‐family construction), but labor costs have not yet started to materially adjust.

Construction Materials Price Index

There are two important factors to notice regarding construction material prices. Overall, at a macro level, they remain at elevated levels historically, with current prices well above what would be a normal growth rate.

The trend is also interesting because it had started to drop and then last month there was some stabilizing in the data (mildly reversing course).

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Biz Tip Topic Expert: Vanessa Conlin, CPA

Vanessa Conlin, CPA

Vanessa is a Principal at SVA Certified Public Accountants and is responsible for audits, reviews, and compilations of financial statements for clients in a wide variety of industries. She also assists with other agreed-upon procedure assurance engagements to address specific client issues. Vanessa is in charge of a large number of employee benefit plan audits at SVA. She prepares and oversees the preparation of audit fieldwork and required financial statements and supplemental schedules and assists clients with various other compliance-related issues with the plans.

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