In today’s construction news, learn about how, according to the Associated General Contractors of America, the construction industry in the United States increased employment by 17,000 in December and raised wages at a higher rate than other sectors of the economy. Meanwhile, landlords are lowering asking rents due to an increase in availability and vacancies, especially in the South and West. On the other hand, concerning the development of the Maryland Offshore Wind Project, US Wind has petitioned the National Oceanic and Atmospheric Administration for Incidental Take Regulations. Lastly, the hotel industry in the United States is preparing for a prosperous year by experiencing a significant upsurge in construction projects and renovation endeavors. Recent findings from Lodging Econometrics (LE) underscore the sector’s exponential expansion.
Pay in the US Construction Industry is Still Rising
Original Source: U.S. construction wages continue to rise
In December, the Associated General Contractors of America reported 17,000 new construction jobs and quicker salary growth than other industries.
Authorities analyzed government data for the Jan. 5 report. Association officials said a recent study revealed contractors anticipate to hire more staff in 2024 but are having trouble finding competent people.
Ken Simonson, the association’s senior economist, said “the above-average wages that the construction industry pays have helped contractors add workers.” More over two-thirds of enterprises in our poll aim to expand in 2024, but they expect it to be harder than in 2023.
From November to December, seasonally adjusted construction employment rose 17,000 to 8,056,000. New positions totaled 197,000 in the past year. It outperformed the economy’s 1.7% job increase by 2.5%.
December saw 5,500 residential building and specialty trade contractors hire and 40,100 (1.2%) over the year. The month saw 11,900 new jobs at nonresidential construction enterprises, including building and specialty trade contractors, heavy and civil engineering organizations, and 157,300 (3.4%) since December 2022.
Over the year, production and nonsupervisory construction workers, including most worksite craft workers and many office workers, earned $34.92 per hour, up 5.1%. Construction workers earned approximately 19% more than private-sector production workers in December.
U.S. Rents Fall for the Third Month in a Row as Apartment Construction Soars
Original Source: U.S. Rents Drop for Third Straight Month as Apartment Construction Booms
In recent years, new building in the U.S. has increased rental availability, causing prices to fall for the third straight month, according to Redfin.
In December, Redfin reported a 0.8% drop in median U.S. asking rent to $1,964. In November, the yearly reduction was 2.1%, the biggest since 2020, and in October, 0.3%. December rents down 0.2%.
Since the building boom has created vacancies, several landlords have lowered rates. As a way to attract renters, they are offering free months and discounted parking. Renters’ overall pricing is likely reducing quicker than data suggests due to these reductions.
People are guarding their money because rents are only 4.4% off their August 2022 record high. Economic instability, home formation slowdown, and affordability issues may be behind the decline.
“High supply—more so than low demand—is driving rent declines,” says Redfin economics research lead Chen Zhao. Rent decreases may be driven by slowing rental demand if mortgage rates continue to fall rapidly in 2024. Due to more Americans buying homes, landlords would have more vacancies.
New and under-construction U.S. apartments are up from last year. In more than 30 years, the number of completed flats and structures under development is near a record high.
Now that tenants have more options, the rental vacancy rate rose to 6.6% in the third quarter, the highest since 2021.
Rentals fell in the South and West but rose in the Midwest and Northeast. South median asking rent declined 1% to $1,632 while West median rent fell 0.6% to $2,346. It increased 3.7% to $1,434 in the Midwest and 1.7% to $2,439 in the Northeast.
Those numbers display local construction patterns. Since Midwest and Northeast building has lagged behind the South and West, vacancies have decreased and price cuts have been less likely.
In the South and West, rents are falling and vacancies are rising, so now is a good time to shop around or renegotiate your rent if your lease is up, Zhao added.
For Offshore Wind Construction, US Wind Asks Permission From the Marine Mammal Take Authority
Original Source: US Wind requests marine mammal take authorization for offshore wind construction
US Wind has requested Incidental Take Regulations from NOAA for the Maryland Offshore Wind Project.
A few 19 marine mammal species would be allowed to be taken under the laws. Though undefined, a “small number” is less than one-third of estimated local populations. NOAA defines take as harassing, hunting, catching, or killing marine mammals. Application allows unintentional take of small numbers, but purposeful take is forbidden.
Take includes careless or purposeful airplane or boat operating, holding marine creatures, and other disturbances. Take can occur through level A harassment, which could damage these species in the wild, or level B harassment, which could disrupt breathing, migratory, breeding, and sheltering.
Pile driving and site assessment surveys may cause incidental take, according to project papers. The take proposal includes a pile driving prohibition from Dec. 1 to April 30, when North Atlantic right whales are expected to be most abundant in the project region. Additional provisions could include delays if whales are seen or heard within particular distances.
The five-year regulations, from 2025 to 2029, are related to the proposed wind farm off Maryland’s shore in the Bureau of Ocean Energy Management leasing area and cable routes that must run onshore.
MarWin, Momentum Wind, and Future Development are three construction initiatives scheduled for 2025, 2026, and 2027, respectively. These projects could result in 114 wind turbine generators, four offshore substations, and one meteorological tower in the lease area, 10 nautical miles off Fenwick Island and Ocean City.
Up to four offshore cables could be routed from substations to anticipated landing under 3Rs Beach or Tower Road in Delaware Seashore State Park.
NOAA says it will evaluate public comment on this US Wind permission request before making a decision. The public comment period ends Feb. 5.
The proposed Incidental Take Regulations would be in force from Jan. 1, 2025, until Dec. 31, 2029. Find project details on regulations.gov by searching NOAA-NMFS-2023-0110-0001.
Evaluating Year-End Statistics for the US Hotel Industry
Original Source: Breaking Down US Hotel Industry’s Year-End Figures, 2024 Outlook
The U.S. hotel business is expecting a strong year with more development and refurbishment projects. New Lodging Econometrics (LE) findings show the sector’s rapid growth.
The U.S. has 59,569 hotels with 5,647,346 rooms by the third quarter. The year 2023 saw 345 new hotels with 41,114 rooms. The hotel analytics company predicted 182 hotels and 24,790 rooms in the fourth quarter of 2023, but it did not say if it had crossed that milestone.
If such predictions come true, the nation’s hotel scene would have 59,751 hotels and 5,672,136 rooms, up 1.2 percent year-over-year. LE predicted 664 new hotels and 79,286 rooms in 2024, a 1.4 percent increase year-over-year.
Hotel Construction Data
The data shows that 1,063 projects, totaling 140,331 rooms, were underway in Q3 2023. This represents an 8% project increase and 4% room expansion year-over-year. Construction is set to accelerate this year, with 2,234 projects, containing 257,729 rooms, scheduled to begin in 2024—an eight percent and nine percent increase, respectively.
Another perspective is that early-stage ventures are nearing an all-time high. Those number 2,407 with 274,616 rooms, up 7% year-over-year. Despite missing information by 27 projects and 5,296 rooms, these statistics are close.
Relatedly, renovations and conversions are booming. A remarkable 1,100 projects and 146,757 rooms were being renovated in Q3 2023. The rehabilitation and conversion pipeline has grown to 1,912 projects and 258,568 rooms, a record high. LEs expect these positive trends to last two years.
Hospitality Employment Data
Despite these growth estimates, leisure and hospitality employment has declined since pre-pandemic periods. December 2023 saw 40,000 industrial employment gains. The sector added 39,000 jobs per month in 2023, compared to 88,000 in 2022.
Close of 2023 Sector Stats
CoStar’s newest report on the week ending December 30, 2023, showed improved U.S. hotel industry performance. CoStar provides leading real estate market data, analytics, and insights. STR claimed that this latest data lowered year-over-year comparisons.
For the week of December 24-30, 2023, the occupancy rate was 50.1%, down 7.1% from 2022. Revenue per Available Room (RevPAR) fell 9.7% to US$82.01, while Average Daily Rate (ADR) fell 2.8% to US$163.58. The week in 2022 contained New Year’s Eve, a generally strong hospitality time, which contributed to this downward trend.
Looking at regional performance, Miami stood out among the Top 25 Markets, with occupancy up 3.9 percent to 79.6 percent. This increase was boosted by the Capital One Orange Bowl and New Year’s Eve festivities. Anaheim, a California resort, saw 11.9 percent (US$219.71) and 12.5 percent (US$160.25) ADR and RevPAR growth.
Not all markets fared well. Las Vegas and Nashville saw RevPAR drop 28.3% (to US$112.79) and 27.3% (to US$80.19), respectively, highlighting the multiple problems hospitality centers face in the present context.
Summary of today’s construction news
To put it simply, over the course of the year, the average hourly wage for production and nonsupervisory employees in the construction industry—which includes the majority of worksite craft workers and many office staff—rose by 5.1% to $34.92 per hour. In December, wage premiums offered by construction companies were over 19% higher than the average hourly rate for all production workers in the private sector.
Meanwhile, the analysis revealed that while rents in the Northeast and Midwest were still rising, they had decreased in the South and West. The South saw a 1% decrease in median asking rent to $1,632, and the West saw a 0.6% decrease to $2,346. It increased 3.7% annually to $1,434 in the Midwest and 1.7% to $2,439 in the Northeast.
On the other hand, there are three construction campaigns scheduled for completion in 2025, 2026, and 2027: MarWin (2025), Momentum Wind (2026), and an unnamed project known as Future Development (2027). These projects would result in a leasing area that is approximately 10 nautical miles off the coasts of Ocean City and Fenwick Island. Within the lease area, there would be a maximum of 114 wind turbine generators, four offshore substations, and one meteorological tower.
Lastly, the data shows that 1,063 projects totaling 140,331 rooms were under development as of Q3 of 2023. This translates to a 4% increase in rooms and an 8% increase in projects year over year.
