Construction industry adds workers, but…

State Route 9_2_rgbThere are signs that the nation’s construction industry is rebounding, but it will take a while before it fully recovers, according to one building trade association.

Construction employment expanded in 195 metro areas, declined in 90 and was stagnant in 54 between January 2013 and January 2014, according to a new analysis of federal employment data released by the Associated General Contractors of America.

Association officials noted, however, that despite the gains construction employment remained below peak levels in all but 21 metro areas.

“It is a sign of the continued strengthening of the construction industry that nearly 60 percent of metros added construction jobs from a year earlier despite the severe winter conditions in much of the country this January,” said Ken Simonson, the association’s chief economist. “Nevertheless, the industry’s recovery has a long way to go with only a smattering of metro areas exceeding their previous peak January level of employment.”

Los Angeles-Long Beach-Glendale, Calif. added the largest number of construction jobs in the past year (8,100 jobs, 7 percent), followed by Houston-Sugar Land-Baytown, Texas (7,900 jobs, 4 percent), Santa Ana-Anaheim-Irvine, Calif. (7,800 jobs, 11 percent) and Dallas-Plano-Irving, Texas (7,200 jobs, 7 percent).  The largest percentage gains occurred in Pascagoula, Miss. (46 percent, 2,100 jobs), El Centro, Calif. (39 percent, 700 jobs) and Steubenville-Weirton, Ohio-W.V. (38 percent, 600 jobs).

The largest job losses from January 2013 to January 2014 were in Gary, Ind. (-4,400 jobs, -25 percent); followed by Putnam-Rockland-Westchester, N.Y. (-2,100 jobs, -8 percent) and Virginia Beach-Norfolk-Newport News, Va.-N.C. (-1,500 jobs, -4 percent).  The largest percentage decline for the past year was also in Gary, followed by Redding, Calif. (-17 percent, -400 jobs) and Elizabethtown, Ky. (-14 percent, -200 jobs).

Greeley, Colo. experienced the largest percentage increase among the 21 cities that hit a new January construction employment high from the prior January peak (20 percent higher than in 2013).  Baton Rouge, La. added the most jobs since reaching its prior January peak in 2013 (4,500 jobs).  Phoenix-Mesa-Glendale experienced the largest drop in total construction employment compared to its prior, January 2006, peak (-80,900 jobs) while Lake Havasu City-Kingman, Ariz. experienced the largest percentage decline compared to its January 2006 peak (-69 percent).

Association officials said the latest figures were a sign that construction employment is rebounding in many parts of the country, but most places still have a long way to go before returning to prior employment levels.  They added that many contractors across the country were worried about a possible slowdown in federally-funded transportation projects this summer when the federal Highway Trust Fund is expected to hit a zero balance.

“The industry is slowing digging itself out of a construction employment hole that got pretty deep during the past few years,” said Stephen E. Sandherr, the association’s chief executive officer.  “If Congress and the Obama administration can’t figure out a way to address highway funding shortfalls very soon, that hole is only going to get deeper.”


Contractors get chilled by winter weather

beachconstructionjpg-b8af82ec8dec54d3_largeCommercial contractors around the nation continue to struggle to find work, and this year’s terrible weather has not helped them.

Nonresidential construction spending declined for the second consecutive month, falling 0.3 percent in January, but is up 6.5 percent over the past year, according to a March 3 release by the U.S. Census Bureau.

Spending for the month totaled $578.7 billion on a seasonally adjusted, annualized basis.

“Wicked weather has produced a temporary halt to the nation’s nonresidential construction recovery,” said Associated Builders and Contractors chief economist Anirban Basu. “Based on backlog and other leading indicators, 2014 should have gotten off to a decent start; however, the cold and dislocating weather has now persisted into March, strongly suggesting that the first quarter of 2014 will not end up being a period of progress for the nation’s nonresidential construction segments.

“Though this winter has been more challenging than most, January declines in nonresidential construction spending are not unusual, even on a seasonally adjusted basis. During six of the past seven years, January nonresidential construction spending has fallen, often sharply. The implication is that 2014’s weak start should not be indicative of what performance is likely to be come spring.

“Although spending declined in 11 of 16 nonresidential construction subsectors, half of the six largest subsectors posted increases for the month. This is a reflection of a number of factors, including technological innovation in the nation’s energy sector, led by North Dakota and Texas, and the start of two large manufacturing projects: a $450 million oil refinery in North Dakota and a $1.2 billion propane dehydration facility in Alvin, Texas.”

In aggregate, five of the 16 nonresidential construction subsectors posted increases in spending in January:

Communication construction spending was up 18.2 percent for the month and 40.4 percent for the year.

Highway and street-related construction spending expanded 3.7 percent in January and increased 15.2 percent compared to the same time last year.

Manufacturing-related spending expanded by 3.5 percent on a monthly basis and increased 7.1 percent for the year.

Spending in the water supply category increased 1.7 percent on the month but decreased 7.9 percent for the year.

Construction spending in the transportation category grew 1.2 percent on a monthly basis and expanded by 7.8 percent on an annual basis.

Spending in 11 nonresidential construction subsectors decreased in January, including:

Amusement and recreation-related construction spending was down 9.7 percent on a monthly basis and has shed 4 percent from the same time last year.

Sewage and waste disposal-related construction spending declined 4.3 percent for the month, but increased 2.2 percent on a 12-month basis.

Commercial construction spending fell 2.5 percent in January, but increased 12.4 percent on a year-over-year basis.

Religious spending fell 2.5 percent for the month and 12.1 percent from the same time last year.

Education-related construction spending fell 1.6 percent for the month and 2 percent on a year-over-year basis.

Health care-related construction spending fell 1.2 percent for the month and 4.5 percent for the year.

Lodging construction spending fell 0.5 percent on a monthly basis, but increased an astonishing 44.8 percent on a year-over-year basis.

Public safety-related construction spending fell 0.3 percent on a monthly basis and declined 0.2 percent on a year-over-year basis.

Office-related construction spending dipped 0.2 percent in January but is up 11 percent from the same time one year ago.

More puzzling numbers reported on construction industry

The construction industry has again released statistics that do not seem to quite add up, this time concerning employment.

In July, builders recorded a loss of 6,000 jobs in July, according to figures from the U.S. Department of Labor. Yet, construction unemployment fell to 9.1 percent, down from 9.8 percent last month and significant decrease from the 12.3 percent jobless rate reported in July 2012.

According to a leading construction economist, the labor numbers make sense when compared with spending, and it is yet more bad news for the industry.

“(This) employment report is consistent with the June construction spending report, which indicated that overall construction spending declined by 0.6 percent and that nonresidential construction spending was off by 1 percent,” said Associated Builders and Contractors (ABC) chief economist Anirban Basu. “That type of performance is not consistent with robust job creation, so it’s no surprise that the construction industry did not deliver net new jobs last month.”

In the U.S., nonresidential building construction employment increased by 300 jobs for the month and is up by 18,700 jobs, or 2.8 percent, since July 2012. Nonresidential specialty trade contractors lost 9,800 jobs for the month, but employment remains 1.8 percent higher compared to one year ago. Employment for heavy and civil engineering construction was down by 2,000 jobs for the month, but is up by 19,200 jobs, or 2.2 percent, on a year-over-year basis.

In comparison, residential building construction employment increased by 100 jobs in July and has expanded by 7,400 jobs, or 1.3 percent, during the past 12 months. Residential specialty trade contractors added 6,200 jobs in July and have added 84,700 jobs, or 5.8 percent, since July 2012.

“The major source of construction employment loss was among nonresidential specialty trade contractors, which forfeited nearly 10,000 jobs in July,” Basu said. “This segment had been recovering nicely, but now appears to be feeling the effects of an economy growing at less than 2 percent.

“Meanwhile, the loss of 2,000 jobs in the heavy and civil engineering construction sector may be a partial reflection of sequestration. Despite the job losses, the construction unemployment rate declined last month; however, much of the drop has been attributed to people leaving the industry.”

The Mississippi Department of Employment Security (MDES) projects a 7.3 percent increase in construction managers through 2020, while construction trade workers are forecast to grow 4.9 percent. MDES projects the state’s construction industry will need 6.5 percent more general laborers over the same time period.

The latest figures from the U.S. Dewpartment of Labor shows Mississippi’s construction community employing approximately 50,500 workers — or about 46.742 employment per 1,000 state jobs.

The employment picture follows a recent trend of confusing construction numbers. In June, construction materials prices decreased 0.1 percent.

Taken as a whole, materials prices had remained flat for the previous several months. However, among the various commodities, prices showed wide variances — some up, some down.

“This elevated level of price stability is somewhat unexpected given shifting monetary policies in much of the world, including in the form of substantial money supply creation, concerns regarding the U.S. fixed income and equity markets, which has rendered investors a bit more skittish of late, and a global economy positioned to expand more than 3 percent this year,” said Basu in a statement back in June. “Despite those factors, commodity prices have remained relatively stable and so have nonresidential construction materials prices.”