“The coalition is disappointed that yet another effort by the Biden administration is pushing inflationary PLA schemes on federally assisted projects that may exacerbate the construction industry’s skilled labor shortage of more than half a million,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC has tracked pro-PLA language in more than $100 billion worth of federal agency grant programs for state and local government infrastructure projects during the last two years, which is troubling enough. However, this is the first time PLA preferences have been expanded to purely private construction via the federal tax code.”

The coalition also seeks clarity about the alternative to the controversial pro-PLA policy in the CHIPS Incentives Program’s Commercial Fabrication Facilities Notice of Funding Opportunity.

“While the coalition vehemently opposes the PLA preference policy in the notice, we appreciate its inclusion of an alternative policy in the form of workforce continuity plans and are seeking further clarity from Commerce,” said Brubeck. “It is unclear if this alternative is workable for CHIPS recipients and their contractors or if Commerce will penalize applicants who do not require PLAs.”

The construction industry added 24,000 jobs on net in February, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by 249,000 jobs, an increase of 3.2%.

Nonresidential construction employment increased by 11,600 positions, with growth registered in all three subcategories. Heavy and civil engineering added 7,700 net new jobs, while nonresidential specialty trade added 2,200 positions. The number of nonresidential building jobs increased by 1,700.

The construction unemployment rate fell to 6.6% in February, down from 6.9% in January. Unemployment across all industries rose from 3.4% in January to 3.6% last month.

“Earlier this week, the Job Openings and Labor Turnover Survey indicated that the number of available, unfilled jobs in construction plummeted in January,” said ABC Chief Economist Anirban Basu. “The February jobs report makes it more likely that this data point is an aberration. Both residential and nonresidential contractors added jobs in February, which is consistent with ABC’s Construction Confidence Index indicating that many contractors continue to seek additional staffing.

“While industry momentum persists, the jobs report suggests that the Federal Reserve still has considerably more work to do to slow the economy,” said Basu. “Though average hourly earnings are not expanding as quickly as they had been, wages are still rising too rapidly on an annual basis to position the Federal Reserve to restore inflation to its 2% target. Accordingly, monetary policy is set to tighten more quickly going forward, with interest rates rising further and staying higher for longer.

“Construction industry momentum may falter at some point in the future as project financing becomes increasingly expensive,” said Basu. “That said, some contractors will continue to have significant workflow even in the instance of an economywide recession. That’s due to the arrival of megaprojects, including those emerging from infrastructure programs and investment in more manufacturing capacity in America.”