by Marcy Marro | January 3, 2022 12:00 am
The holidays and festivities have wrapped up, and everyone is focused on making plans for the year ahead. This past almost two years have brought about enormous change for everyone and every business. We’ve all had to learn how to adapt and pivot amidst a pandemic, and we’ve also learned how to come out of challenges stronger and better.
While we’re not in the clear just yet, we’re still dealing with supply chain issues and the seemingly never-ending labor shortage, things are starting to look up. According to The American Institute of Architects (AIA), the demand for design services continued to increase this past year, marking 10 consecutive months of increases.
The Associated Builders and Contractors (ABC) reported its Construction Confidence Index readings, which show sales, profit margins and staffing levels, increased in November, indicating expectations of growth over the next six months. Anirban Basu, ABC chief economist, said it’s getting better. “While the outlook for construction remains imperfect, extraordinarily low interest rates have created enough appetite for deal-making to push backlog higher and persuade the average contractor that sales, employment and profit margins will climb over the next six months.”
Although things are looking up, there is still uncertainty in the future. As Kermit Baker, Hon. AIA, Ph.D., AIA chief economist noted, the period of elevated billing scores nationally and across all major regions and construction sectors appear to be winding down. “Ongoing external challenges like labor shortages, supply chain disruptions, spiking inflation, and prospects for rising interest rates will likely continue to slow the growth in firm billings in the coming months,” he said.
On the construction side, ABC reported the construction input prices increased in November, as did the nonresidential construction input prices. Overall, construction input prices are up 23.5% year over year, with nonresidential construction input prices up 24.5%. Basu warned that contractors should not be the only ones concerned with inflation, as the impact reaches many stakeholders. “There is no indication that materials prices will fall in the near future,” he said. “With the omicron variant now circulating around the world and leading to a next wave of lockdowns and supply chain disruptions, demand for key commodities will continue to exceed supply. Among the implications is that estimators will be under enormous pressure to predict materials prices amid enormous volatility and uncertainty.”
Uncertainty in the future always remains, but as we head into a new year, the prospect of what lies ahead remains mostly positive.
Source URL: https://www.metalarchitecture.com/blog/new-year-new-challenges/
Copyright ©2025 Metal Architecture unless otherwise noted.