- In their Q2 2018 United States Gypsum (USG) + U.S. Chamber of Commerce Commercial Construction Index (CCI), the two organizations said that 9 out of 10 contractors are concerned about the ongoing labor shortage, marking the fourth consecutive quarter that construction companies have expressed apprehension about being able to find enough qualified workers. In addition, 47% of contractors surveyed for the report expected their ability to find adequate labor to diminish during the next six months.
- Despite labor challenges, contractor confidence is high, with 96% reporting that they expect the demand for commercial construction services to increase in the next 12 months. The Q2 2018 review also revealed that the current contractor backlog is 9.3 months — 73% of optimal levels but still strong with room to grow — and that there has been a 12% year-over-year increase to 52% of contractors who expect their revenue to increase in the next 12 months.
- Contractor concern about steel prices jumped significantly to 63% in the second quarter, up 33% from a year ago, with more than 85% of those surveyed expecting U.S. steel tariffs to have some impact on their businesses.
When President Donald Trump first imposed the 25% tariff on foreign steel and a 10% tariff on aluminum, some construction companies reported that the price of steel, vital to many commercial construction projects, had increased by 10%. However, there was not a sense of panic as Canada, the biggest exporter of steel to the U.S., received an exemption from the duty, as did other American allies. Even so, some small manufacturers that rely on steel from abroad said they had lost business to competitors in other countries where there was no such tariff.
Last week, however, the administration turned the U.S. steel import and export market on its head when he revoked exemptions for Canada, Mexico and the European Union. Canada responded immediately and said it would institute a dollar-for-dollar steel tariff as a retaliatory measure and would place additional fees on other American goods. Mexico and the EU followed suit with similar statements.
Since the president's May 31 announcement, there have been efforts on the part of some lawmakers to limit the president's ability to impose tariffs by giving Congress oversight. A bill introduced by Sen. Bob Corker (R-Tenn) would require Congressional approval of any tariffs imposed for purposes of national security, which is the reason Trump has given for implementing steel and aluminum duties.