Infrastructure and Manufacturing Megaprojects Propel Construction Industry in Q3 2024
The CBIZ Commercial Construction Index for Q3 2024 shows continued momentum in the construction industry, driven primarily by infrastructure and manufacturing megaprojects. Manufacturing construction spending remains high due to federal incentives and reshoring efforts. While residential construction activity has slowed in 2024, it remains above pre-pandemic levels.
The construction sector demonstrated strong employment growth, adding jobs for five consecutive months through October, hiring at twice the rate of the broader economy. Material prices have helped contain construction costs, though future trade policies could impact input prices. Despite Federal Reserve rate cuts, borrowing costs remain high with tight lending standards.
Il CBIZ Commercial Construction Index per il terzo trimestre del 2024 mostra un continuo slancio nel settore delle costruzioni, trainato principalmente da megaprogetti infrastrutturali e di manifattura. La spesa per la costruzione nel settore manifatturiero rimane elevata grazie agli incentivi federali e agli sforzi di reshoring. Sebbene l'attività di costruzione residenziale abbia rallentato nel 2024, essa rimane al di sopra dei livelli pre-pandemia.
Il settore delle costruzioni ha dimostrato una forte crescita occupazionale, aggiungendo posti di lavoro per cinque mesi consecutivi fino a ottobre, assumendo a un ritmo doppio rispetto all'economia più ampia. I prezzi dei materiali hanno contribuito a contenere i costi di costruzione, anche se future politiche commerciali potrebbero influenzare i prezzi degli input. Nonostante i tagli ai tassi della Federal Reserve, i costi di prestito rimangono elevati con criteri di concessione di prestiti restrittivi.
El CBIZ Commercial Construction Index para el tercer trimestre de 2024 muestra un impulso continuo en la industria de la construcción, impulsado principalmente por megaproyectos de infraestructura y manufactura. El gasto en construcción manufacturera se mantiene alto debido a los incentivos federales y los esfuerzos de reubicación. Aunque la actividad de construcción residencial ha disminuido en 2024, sigue por encima de los niveles prepandémicos.
El sector de la construcción ha demostrado un fuerte crecimiento en el empleo, añadiendo puestos de trabajo durante cinco meses consecutivos hasta octubre, contratando al doble de la tasa de la economía en general. Los precios de los materiales han ayudado a contener los costos de construcción, aunque las futuras políticas comerciales podrían afectar los precios de los insumos. A pesar de los recortes de tasas de la Reserva Federal, los costos de endeudamiento siguen siendo altos con estándares de préstamos estrictos.
CBIZ 상업 건설 지수는 2024년 3분기 건설 산업의 지속적인 동력을 보여주며, 주로 인프라 및 제조 메가 프로젝트에 의해 추진되고 있습니다. 제조업 건설 지출은 연방 인센티브와 리쇼어링 노력 덕분에 여전히 높습니다. 주거 건설 활동은 2024년에 둔화되었지만, 팬데믹 이전 수준보다 여전히 높습니다.
건설 부문은 강력한 고용 성장을 보여주었으며, 10월까지 5개월 연속으로 일자리를 추가하며, 전체 경제의 두 배 속도로 고용을 확대하고 있습니다. 자재 가격은 건설 비용을抑制하는 데 도움이 되었으나, 향후 무역 정책이 투입 가격에 영향을 미칠 수 있습니다. 연방준비제도의 금리 인하에도 불구하고, 대출 비용은 엄격한 대출 기준으로 여전히 높습니다.
L'Indice de Construction Commerciale de CBIZ pour le troisième trimestre 2024 montre une dynamique continue dans le secteur de la construction, principalement soutenue par des mégaprojets d'infrastructure et de fabrication. Les dépenses de construction manufacturière restent élevées grâce aux incitations fédérales et aux efforts de relocalisation. Bien que l'activité de construction résidentielle ait ralenti en 2024, elle reste au-dessus des niveaux d'avant la pandémie.
Le secteur de la construction a montré une forte croissance de l'emploi, créant des postes pendant cinq mois consécutifs jusqu'en octobre, embauchant à un rythme deux fois plus élevé que l'économie au sens large. Les prix des matériaux ont aidé à contenir les coûts de construction, bien que les futures politiques commerciales pourraient affecter les prix des intrants. Malgré les baisses de taux de la Réserve fédérale, les coûts d'emprunt restent élevés avec des normes de prêt strictes.
Der CBIZ Commercial Construction Index für das 3. Quartal 2024 zeigt weiterhin Schwung in der Bauindustrie, vor allem getrieben durch Infrastruktur- und Fertigungsmegaprojekte. Die Ausgaben für die Fertigungsbau bleiben aufgrund föderaler Anreize und Rückverlagerungsmaßnahmen hoch. Während die Aktivität im Wohnungsbau im Jahr 2024 zurückgegangen ist, bleibt sie jedoch über dem Niveau vor der Pandemie.
Der Bausektor verzeichnete ein starkes Beschäftigungswachstum, wobei er bis Oktober fünf Monate in Folge Arbeitsplätze hinzugefügt hat und mit einer doppelt so hohen Rate wie die Gesamtwirtschaft eingestellt hat. Die Materialpreise haben dazu beigetragen, die Baukosten zu kontrollieren, obwohl zukünftige Handelspolitiken die Inputpreise beeinflussen könnten. Trotz der Zinssenkungen der Federal Reserve bleiben die Kreditkosten hoch, da strenge Kreditvergabeanforderungen gelten.
- Manufacturing construction spending remains elevated due to federal incentives
- Construction industry added jobs for 5 consecutive months
- Construction hiring rate is double that of broader economy
- Lower material prices helping contain construction costs
- Residential construction activity showing slowdown throughout 2024
- High borrowing costs and tight lending standards persist
- Uncertainty over future trade policies could impact input prices
- Bond yields have risen, suggesting higher interest rates for longer
Insights
The construction sector exhibits a tale of two markets in Q3 2024. The nonresidential segment demonstrates robust growth, primarily driven by manufacturing megaprojects and infrastructure initiatives supported by federal legislation. This trend aligns with broader economic reshoring efforts and could maintain momentum regardless of political shifts. Current staffing levels are particularly noteworthy, with the industry adding jobs at double the broader economy's rate.
Material costs have moderated, providing some relief to margins, though future trade policies could impact input prices. The combination of continued manufacturing investment and potential interest rate cuts suggests a positive outlook for the nonresidential sector, despite some headwinds in borrowing costs. The residential segment's slowdown, while concerning, appears cyclical rather than structural, with potential for recovery once interest rates normalize.
For CBIZ (CBZ), this report demonstrates strong positioning in a growing market segment. The company's acquisition of Marcum LLP and subsequent launch of the Construction Index strengthens its authority in the construction advisory space. With nonresidential construction maintaining momentum and manufacturing projects continuing to drive growth, CBIZ's construction services division is well-positioned to capitalize on these trends.
The divergence between residential and nonresidential sectors creates opportunities for specialized consulting services, particularly in navigating complex federal incentives and reshoring initiatives. The sustained high level of construction activity, especially in manufacturing, suggests potential revenue growth for CBIZ's construction advisory services in the coming quarters.
The index, produced by the CBIZ National Construction Services group, reveals significant trends in both nonresidential and residential construction activities.
Infrastructure projects and ongoing manufacturing megaprojects once again drove nonresidential construction activity. "Manufacturing-related construction spending remains extraordinarily elevated due to federally incentivized megaprojects and a broader effort to reshore production capacity," said Anirban Basu, Chief Construction Economist at CBIZ. "While the incoming presidential administration may be less amenable to legislation like the CHIPS and Science Act and the Inflation Reduction Act, its trade policy should induce more reshoring, supporting ongoing momentum in the manufacturing segment."
In contrast, residential construction activity, although still high compared to pre-pandemic years, has slowed throughout the first nine months of 2024. "While there remains a structural shortage of housing units in this country—a shortage that homebuilders will eventually address—residential activity is likely to slow in the coming quarters and won't rebound until interest rates are meaningfully lower," said Basu.
Despite some softness in the residential segment, contractors continued to increase their staffing levels during the third quarter. "The construction industry added jobs for the fifth consecutive month in October, and job gains would have been faster if not for hurricanes Helene and Milton," said Basu. "The industry has hired new workers at a blistering pace over the past year, adding employees at exactly twice the rate of the broader economy."
Lower material prices have helped to contain construction costs in 2024, although the outlook now has significantly higher uncertainty. "Despite this recent input price moderation, the next presidential administration's trade policies introduce significant uncertainty to the outlook," said Basu. "Tariffs could drive input prices higher, especially those that come primarily from
Although the Federal Reserve has lowered interest rates, borrowing costs remain high and lending standards tight. "It appears likely that the Federal Reserve will reduce the federal funds rate by another 0.25 percentage points at their December meeting, and yet bond yields have risen since the election, suggesting that markets expect interest rates to remain higher for longer relative to previous forecasts," said Basu.
CBIZ Issues First Construction Index After Acquiring Marcum
Following the acquisition of Marcum LLP, CBIZ proudly presents the Construction Index. Now under the purview of the expanded and enhanced CBIZ Construction team, the Index continues to feature the high-quality insights it is known for.
About CBIZ
CBIZ, Inc. (NYSE: CBZ) is a leading professional services advisor to middle market businesses and organizations nationwide. With unmatched industry knowledge and expertise in accounting, tax, advisory, benefits, insurance, and technology, CBIZ delivers forward-thinking insights and actionable solutions to help clients anticipate what's next and discover new ways to accelerate growth. CBIZ has more than 10,000 team members across more than 160 locations in 21 major markets coast to coast.
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SOURCE CBIZ
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