Quarterly Construction Insights
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Q4 2020
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Q4 2020
Executive Summary
The Quarterly Construction Insights is a review
of the state and health of the construction
economy and other relevant statistics
throughout the United States and Canada. This
CoreLogic report covers matters such as
material and labor costs for construction,
growth rates of these costs, permit approvals
for new construction, and construction jobs.
Why is construction important to begin with?
We owe it to the construction economy for
building the structures we need and love – our
homes, workplaces, marketplaces, and shared
community spaces.
Changes in material and labor costs can have a
significant impact on property owners. When
costs to rebuild increase, owners may find that
they are underinsured in the event of damages
from natural hazards or accidents. In
December 2020, costs for lumber, a significant
component of construction, have increased by
34% YOY and 40% YOY in the United States
and Canada, respectively, as the COVID-19
pandemic has created supply constraints.
Without reassessing a home’s reconstruction
cost value (RCV), homeowners may find
themselves underinsured after an adverse
event. Higher construction costs also mean
less new housing stock and jobs in
construction, constraining the housing supply
and increasing home prices. Home prices in Q4
2020 have seen a 3.5% increase for new
housing and an 8.3% increase for existing.
Fortunately, authorizations for new housing
permits were up 25% YOY in December, and in
the last quarter 152,000 jobs were created in
construction.
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Q4 2020
December Permit Authorizations Up 25% YOY, Lumber Costs Up 34% YOY, and Job Numbers Down 1.9% YOY
Material costs in the U.S. and Canada are higher than in December 2019. U.S. lumber costs
this December were 34% higher than last year.
Labor costs continue to grow faster in the U.S. than in Canada, with many key construction
occupations experiencing earnings growth over 4%. Roofer costs have increased the most
in the U.S. up 5.6% from last December.
Construction employment in December declined YOY by 1.9%. Overall U.S. unemployment
has declined to 6.8% and the USG and Chamber of Commerce Construction Index has
continued to remained low at 60, indicating uncertainty in the construction market.
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YOY Material Trends December 2019 to December 2020
• All construction material aggregates have seen cost
increases from this time last year.
• Prices for drywall have increased at the slowest rate,
remaining stable with an increase of less than 1%.
• Lumber has seen a significant increase in YOY cost at
nearly 34%.
• The average for all monitored U.S. commercial building
materials in December 2020 had an overall annual cost
increase of 9.6%.
Overall, costs in Q4 have increased 3.4% from last quarter.
US. Construction Material Aggregates
Source: CoreLogic. Note: Cost changes are not adjusted for inflation
-20%
-10%
0%
10%
20%
30%
40%
D J F M A M J J A S O N D
Masonry Drywall Steel Roofing
Electrical Lumber Insulation Plumbing
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• All construction material aggregates have seen cost increases
from this time last year.
• Prices for drywall have increased at the slowest rate with an
increase of 1%.
• Lumber has seen a significant increase in YOY cost at nearly
40%.
• The average for all monitored Canadian commercial building
materials in December 2020 had an overall annual cost
increase of 12%.
Overall, costs in Q4 have slightly increased 9.2% from last quarter.
Canada Construction Material Aggregates
YOY Material Trends December 2019 to December 2020
Source: CoreLogic. Note: Cost changes are not adjusted for inflation
-20%
-10%
0%
10%
20%
30%
40%
D J F M A M J J A S O N D
Masonry Drywall Steel Roofing
Electrical Lumber Insulation Plumbing
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Most Significant Cost Increases
Slowest Cost Growth
State Change
Iowa +7.3%
New York +7.0%
Utah +7.0%
State Change
North Dakota +3.3%
Hawaii +3.3%
New Mexico +3.4%
Most Significant Cost Increases
Materials in every state were more expensive in December 2020 than they were in December 2019.
Costs grew by at least 3.3% in every state.
December 2020 YOY Material Cost Changes by U.S. State
Source: CoreLogic. Note: Cost changes are not adjusted for inflation
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Most Significant Cost Increases
Province Change
New Brunswick +8.8%
Saskatchewan +8.7%
Nova Scotia +8.1%
Newfoundland and Labrador
+8.1%
Most Significant Cost Increases
Construction material costs in Canada are rising at high rates in every province. All provinces in the nation experienced
annual cost increases, especially New Brunswick and Saskatchewan.
December 2020 YOY Material Cost Changes by Canada Province
Source: CoreLogic. Note: Cost changes are not adjusted for inflation
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From December 2019 to December 2020, labor costs in the United States grew even faster YOY than last quarter, with cost
growth as high as 5.6% for roofers. Labor costs in Canada continue to remain relatively more stable, with cost growth highest
for plumbers at 2.8%.
Labor Costs in the U.S. and Canada Compared
Labor Cost Change by Occupation(percent change, December 2019 to December 2020)
Source: CoreLogic
0% 1% 2% 3% 4% 5% 6%
Carpenter
Electrician
Laborer
Painter
Plasterer
Plumber
Roofer
U.S. Canada
Note: Cost changes are not adjusted for inflation
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Data may be revised from previous quarter or may not
end at current quarter
*in 1,000s
Sources: U.S. Bureau of the Census, National Association of Realtors, U.S. Bureau of Labor Statistics, The Conference Board,
Freddie Mac, CoreLogic
YOY Labor Costs Each Month in the U.S. YOY Labor Costs Each Month in Canada
Over the last year, labor costs in both the U.S. and Canada continued to grow.
However, the rate at which these costs grew varied considerably. Starting in the summer of 2020, labor cost growth in the U.S.
has climbed significantly. In Canada, labor cost growth has remained more stable.
Changes in Labor Cost Growth
Source: CoreLogic. Note: Cost changes are not adjusted for inflation
1%
2%
3%
4%
5%
6%
Carpenter Electrician Laborer Painter
Plasterer Plumber Roofer
1%
2%
3%
4%
5%
6%
Carpenter Electrician Laborer Painter
Plasterer Plumber Roofer
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The U.S. economy has seen significant disruptions over the
course of the pandemic. However, since last quarter, housing
starts, building permits, home sales, and consumer confidence
have all increased, while unemployment has dropped from
8.8% down to 6.8%. YOY changes in new home prices
increased from 1.5% to 3.5%, while YOY changes for existing
homes rose from 3.8% to 8.3%.
U.S Economic Indicators
Data may be revised from previous quarter or may not end at current quarter*in 1,000s
Sources: U.S. Bureau of the Census, National Association of Realtors, U.S. Bureau of Labor Statistics, The Conference Board, Freddie Mac, CoreLogic
Q3 2020 Q4 2020
Housing Starts* 1432 1592
Building Permits* 1501 1629
Home Sales*NewExisting
71109746137
76508736777
Unemployment 8.8% 6.8%
Consumer Confidence 93.1 93.8
30-Year Fixed 3.0% 2.76%
Q4 2019 Q4 2020
Home Price YOY ChangeNew (%)Existing (%)
1.5%3.8%
3.5%8.3%
ECONOMIC INDICATORS
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Authorized Building Permits
(Units % Change) 12/2019 – 12/2020
Source: U.S. Census Bureau
Units Dec-19 Dec-20 % Change
1 63002 88538 41%
2 1758 2096 19%
3 or 4 1389 1435 3%
5+ 41151 41531 1%
Total 107300 133600 25%
U.S. permit authorizations in December 2020 bounced back at 25% total growth when compared to December 2019. Though all
types of units have seen an increase, 1 and 2 unit permits have dominated this trend with 41% and 19% growth. All regions have
seen an increase in permit authorizations with the South up 29%, the West and Midwest both up 24%, and the Northeast up 5%.
Changes in Permit Authorizations
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Total Construction Employment in December 2020
7,413,000
152,000qtr/qtr
142,000yr/yr
Highest Annual GROWTH
South Dakota
8%Missouri
6%Kansas
6%
Largest Annual DECLINE
Vermont
-23%Iowa
-9%North Dakota
-7%
*Total percent from 9/2019 to 9/2020.
Source: Associated General Contractors of AmericaSource: U.S. Bureau of Labor Statistics
Construction employment totaled 7,413,000 in December, up 152,000 from September.
Employment in construction was down by 142,000 jobs over the past 12 months, a 1.9% decline.
Construction Job Growth by State
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In Q4 2020, the USG Corporation and U.S. Chamber of Commerce stated the Commercial Construction Index increased three points from 57 to 60, remaining low ever since the index was 74 in Q1 2020. 83% of contractors are experiencing delays on projects, but 85% of contractors believe there will be sufficient opportunities for new business in the next 12 months. 31% of contractors are reporting a current shortage of wood/lumber.
Construction Confidence
Sources: USG Corporation and U.S Chamber of Commerce
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CoreLogic tracks construction costs for commercial, residential and agricultural
construction of all types by researching a unique basket of goods (labor and
materials) all around the United States. This research is conducted monthly,
which allows us to monitor fluctuations to commonly used materials.