Settlements in newly negotiated labor agreements reported to the Construction Labor Research Council (CLRC) in 2008 averaged $1.95 or 4.6 percent for their first year. The average second year increase for multi-year agreements was $2.25 or 4.7 percent. The first year percentage increase exceeded the 3.8 to 4.5 percent range of first year averages since 1999. Most 2008 settlements were negotiated during the second quarter of the year.
The average first year increase was up slightly from 2007. Last years first year average was $1.75 or 4.5 percent. The trend has been for settlement averages to be moving slowly upward in recent years.
The higher level of first year increases in 2008 compared to 2007 was matched by higher comparisons of second and third year results. Average second and third year increase for 2008 was more than $2.00. While multi-year contracts were more common, very few were longer than three years.
Regional Variation
CLRC Regional Chart Data
While the East North Central region always accounts for the largest portion of bargaining, it was more dominant this year. East North Central and Middle Atlantic regions were closest to the national average. There was considerable variation in results among individual states in the East North Central.
For the four regions for which comparisons could be made with last year, the average percent increase rose in two and declined in two. All regions, except the Southeast, where the smallest increases occurred, changed by more than half a percentage point. Southwest Pacific recorded the highest increases.
Craft Variation
Average first year increases for a majority of crafts were clustered between 4.5 and 4.8 percent. Only bricklayers, lower, had an average increase more than one percentage point from the all crafts average. As always, craft differences primarily reflect the region of the country in which the contracts were negotiated.
Industry Economic Climate
Construction employment declined throughout the year. From a near record in
2007, it will drop to close to 7.2 million persons in 2008, a decline of over 400,000. While a majority of the decline has been in residential construction, job losses have been recorded throughout the industry.
Reviewing volume, overall activity will decline in 2008 because of the weak residential market. There will still be gains in private non-residential and public construction. Strongest sectors are power and manufacturing.
Inflation, as measured by the Consumer' Price Index (CPI), will increase by close to one percent during 2008. Much higher annual rates were being experienced during the second quarter of the year when most new agreements were signed. Annual increase in construction wages and fringes has matched or exceeded increases in the CPI for over a decade.
Contract Duration
As in most years, agreements of three years or more were most common, nationally and in most regions. While multi-year agreements increased somewhat, very few were longer than three years.