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Construction contracts up, but inflation isn't far behind

Date Posted: February 12 2006

First-year settlements in construction labor agreements negotiated in 2005 averaged $1.53 or 3.9 percent, according to the Construction Labor Research Council.

The average first-year increases were just above the 3.8 percent increases in 2004, but well above the average monetary increase that year of $1.36. That's because more negotiated contracts were settled with higher wage and benefit levels.

"New agreements most commonly resulted in increases between three and five percent," the CLRC said. "For the second and third years, three-quarters of all settlements were within this range."

Other findings in the report:

  • Health and welfare contributions accounted for 78 cents of the new wage allocations.
  • Wage and benefit increases among the various crafts were within a half percentage of the entire industry average.
  • U.S. construction employment is expected to be a record 7.25 million in 2006. Conversely, construction unemployment is expected to be below eight percent, the lowest since 2001. The Consumer Price Index (the inflation rate) will increase about 3.5 percent in 2006, which will be higher than the previous four years. Construction wages will continue to (barely) outpace the inflation rate.
  • Construction labor agreements of three years were most common, a pattern which hasn't changed much over the years.