Multitaskr Blog

A Look At The 2021 Construction Industry Timeline

As we reflect on the highs and lows of building in 2021, it’s evident that the industry led the economy, created thousands of jobs, and was in constant demand for its services.
December 29, 2021 12:00am

The U.S. construction industry is a top contributor to the country’s powerhouse economy. This year alone, construction witnessed its most successful year in spending at $1,490 trillion. As we reflect on building in 2021, it’s evident that the industry led the economy, created thousands of jobs, and its services were in constant demand. With over nine million employees, carpenters, electricians, laborers, foremen, engineers, architects, managers, and other roles, they all faced challenges and success.

January - February

January 2021 marked a new milestone. The U.S. entered its second year fighting a global pandemic, and the unique lifestyle was influencing construction spending. During the first week of January, mortgage rates declined to record lows. Freddie Mac reported that a 30-year fixed home rate dropped from 2.67% to 2.65%. One year earlier, the same mortgage rate was seen at 3.64%. With rates lower than ever, many began to purchase homes. Others chose to refinance; however, single-family home building surged with a demand for home purchases.

Although low rates encouraged many to buy, housing prices started to increase, leaving those in the construction and real estate predicting a hectic spring home-buying season.

During the first two months of the year, several Americans worked remotely. Homeowners started to tackle construction projects that were long overdue or started an improvement they’ve been urging to do but just had no time before COVID-19. 

March - April

In March 2021, nonresidential building picked up by 13%, according to Dodge Data & Analytics.

Several types of building increased in March. The nonresidential building saw its most prominent project in Maspeth, New York, where a $306 million Amazon, Inc. warehouse broke ground. Other increases occurred in institutional building (15%). Schools planned for an upcoming year of in-person learning and implemented new social distancing protocols and filtration into public buildings. The residential building sector did not see an increase. However, Multifamily building starts rose to 33%. Across the warm regions of the West, South Central, and Northeast, building broke ground much more than other areas of the United States. Nonresidential construction led the industry, with its most significant project in Mojave, CA, a $1.2 Billion Sanborn Solar Facility.

The driving force of the construction industry in April was President Biden’s new infrastructure bill. The $2 trillion bill captured the attention of several people in the industry, as the package dedicated $621 billion to transportation infrastructure, $213 billion for affordable and sustainable housing, $100 billion for workforce development, $100 billion for school and education facilities, and billions of more spending for climate, small business, electric vehicle, clean drinking water, and healthcare projects. In April, the bill was presented, however not set to be passed until the end of the year.

May - June

The month of May boomed as building was more active than ever, though construction was about to face a new bottleneck. On May 5, 2021, Bloomberg released the latest prices for lumber. The price per thousand board of lumber had surged by 280%, leaving builders scrambling to find wood at a reasonable cost. Lumber prices continued to soar through spring, scaling the price of construction projects and newly-built single-family homes. The global supply shortage could not be fixed overnight to support the demand and lower the cost.

Amid expensive lumber, home buying was hotter than ever. It almost seemed like high lumber prices didn’t stop someone from buying or building. They just decided to deal with the scramble of supply.

July - August - September

With thousands of employees creating new career paths and some simply not returning to their 9am-5pm office routines, a labor shortage affected the industry. The pandemic started to witness its lowest numbers in cases. Therefore, many returned to in-person work, others traveled, and some decided that their pre-pandemic jobs weren't really for them anymore. The labor shortage hit construction hard as new home construction and improvements were highly demanded.

According to CNN Business, in July 2021, the construction industry needed 430,000 workers and approximately one million workers over the next two to three years. On top of a labor shortage crisis, the sector suffered several material price escalations and a housing market that could not keep up with the demand. Matthew Schimenti, Owner of Schimenti Construction Company, shared in July 2021 the struggles he and his business were facing, "We're losing more people than we're bringing into the industry. People made decisions in their lives to leave the region and the industry [during the pandemic]. It was like putting a puzzle back together to restart, where we literally called a timeout."

There was no immediate fix to the labor shortage. It would take an entire fall season to fix, and results would not show until the end of 2021.

In September 2021, the construction industry in California received news that would change single-family zoning forever. On September 16, 2021, Governor Gavin Newsom signed Senate Bill 9 (SB 9) and Senate Bill 10 (SB 10). Though the laws would not be effective until January 2022, Senate Bill 9 would allow homeowners to complete a lot split on their primary property and build up to four units. The new California law was implemented by Governor Newsom to tackle the housing crisis, creating more housing on existing lots for an affordable rate.

However, not all homeowners favored the bill in regions where people cherished private property and preferred minimal urbanization. S.B. 9 attracted many homeowners who wanted to lower their mortgage payments. It also attracted those who could not purchase a new home during a time of outgrowth and some who were planning on retiring or simply needed more income. With additional housing units, homeowners would be able to rent out the extra living space for long-term use, creating different income streams.

Today there is a lot of questions surrounding the new law. Still, more clarity will be given as homeowners take action and start to submit their lot splits to the city. SB 9 brings another challenge for the industry, creating a demand for a new housing tool to be used.

October - November - December

In October, the labor shortage escalated. However, single-family homebuilding fell to its lowest levels. In regions like the South, a 1.8% drop was reported in construction starts. Homebuilding was the top industry problem, as labor shortages caused project timelines to lengthen. The rising price of material, specifically lumber, and increased proposals. With a labor shortage hurting the industry, over 300,000 new jobs became available across the country, from minimum wage roles to executive positions.

Reflecting on the industry's bottlenecks, housing prices and construction project costs created the main points in 2021. Today, the average price for a single-family home in California is approximately $818,000, increasing from the average home price in March 2021, $758,000. Californians now ask themselves if they will be able to afford the state's cost of living in the upcoming years. Construction is a determining factor for housing and maintenance costs. As we wrap up 2021, permits witnessed an increase for building with more than 5 units in November and December.

The forecast for the 2022 construction industry looks busier than ever. With no slowing down in home buying, a slight drop in lumber prices, and a handful of job opportunities, building is an industry you might want to consider.

If you'd like to get ahead and tackle your home improvement new year's resolutions with Multitaskr, click here to get a free report on any of our construction solutions.