Construction Industry Trends (July 2024)

Our monthly construction industry trend report combines the latest industry data with our internal findings from National Business Capital’s award-winning team. With extensive experience in the construction industry since 2007, we are thrilled to share these findings and expand on them through our unique expertise.

Our goal is to provide business leaders and decision-makers with the necessary information and data to make well-informed decisions in their business endeavors.

Major Manufacturing Construction Sites

The increased focus on U.S. manufacturing has resulted in a surge in the construction of new facilities. Understanding the trend from a national perspective offers unique insights into spending, employment, and activity patterns across the industry as a whole.

Source: Construction Dive

July 2024 – The CHIPS and Science Act, passed in August 2022, incentivized the construction of manufacturing facilities. Since then, the nation has seen a significant increase in construction activity in the manufacturing sector, many with expensive valuations.

As shown in the map above, the eastern half of the U.S. has higher activity than the west. Considering that the legislation was passed only two years ago, it’s possible that the western and central U.S. states simply haven’t broken ground on their projects yet. Construction companies should monitor bidding activity in this area if they want a piece of the manufacturing surge.

Construction Job Openings, Hires, and Layoff Trends

Employment statistics offer a view into the construction industry’s capability. Job openings and hiring suggest an industry ready to expand, while layoffs suggest a contraction.

Source: AGC

July 2024 – It’s hard to ignore the spike in layoffs in 2020, but the data shows a significant decrease in layoffs and discharges since then. As we’ve reported in previous months, job openings rose then fell, while hiring followed a less dynamic upward trend.

The fall in job openings isn’t cause for concern, in our opinion, because of the hiring data. Hiring rose consistently throughout the peak in job openings, suggesting that the job openings were filled. The industry isn’t contracting in the slightest; It’s growing, taking on more work, and becoming stronger.

It’s also important to take geographic data into account, especially as we get closer to the latter half of 2024. As construction companies and contractors slow their operations for the colder weather, job openings and hiring data will begin to lull.

Construction Material Cost Trends (1-Month & 12-Month Change)

Fluctuating material costs can have major implications for a construction company’s bottom line. Understanding the ebb and flow from month to month can reveal opportunities to save costs.

Individual Material Costs

Subcontractor Price Indexes (Non-Residential Building Work)

July 2024 – Diesel fuel has fallen considerably, both since the start of 2024 and month over month. Construction companies leveraging this resource in their operations have been able to lower their overhead and shift capital to other areas of their business, as noted in National Business Capital’s conversations with clients.

However, metal materials have remained at a higher cost, which has complicated building projects nationwide. Subcontractor price indexes have seen little change, with the exception of electrical contractors, which have enjoyed falling prices over the last year.

Dodge Momentum Index

The Dodge Momentum Index, a gauge of non-residential building projects in planning stages, leverages trends in the past 12 months to predict the industry’s direction in the next year.

Source: Dodge Construction

July 2024 – The Dodge Momentum Index (DMI) increased by 10.4% from May into June and was 7% higher than the same time last year. The month-over-month increase comes from a surge in $100MM+ valued projects, as well as a heightened focus on data center construction.

This data supports the trend of a growing construction industry. Major projects are in the planning stages and moving forward. Although there’s a risk that these projects will be delayed or paused, a dynamic pipeline with a variety of work types is great news for the industry after years of uncertainty.

National Business Capital’s Construction Recap (July 2024)

Each month, we’ll offer our unique viewpoint on the construction industry’s short to mid-term outlook. Our insights come from a combination of available industry statistics, internal data, and the general sentiment of the construction clients we work with daily.

• Construction Funding Volume Increases by 18.7% – Construction funding volume at National Business Capital was 18.7% higher in the first half of 2024 compared to the same time period in 2023. The increase is due to a combination of higher-quality financials, increased project valuations, higher equipment costs, and a more favorable view of the industry from lenders. This trend follows the approval dollar increase we highlighted in June. Approvals were 71.92% higher in June, which has translated to higher funding amounts for construction companies altogether
• 30.5% Increase in the Average Funding Size for Construction Companies – Similarly, the average funding size increased by 30.5% from June 2024 into July 2024. Transaction volume was slightly lower month over month, which speaks to the higher approval and funding volume trends.
• Highest Funding Volume in New York, Texas, and California – National Business Capital works with businesses nationwide, but New York, Texas, and California all have the highest funding amounts in 2024 YTD. Georgia and Florida hold positions 4 and 5.