Tag Archive for 'ABC'

ABC Reports: Construction Industry Unemployment Rate Falls To 10.8 Percent

Published on June 7, 2013 in Daily Dirt and National. Closed Tags: , , , , , , , , , .

CEU2“The hope is that this number, in conjunction with overall economic expansion, will ultimately produce a more sustained and more robust nonresidential construction recovery in the months ahead.” —ABC Chief Economist Anirban Basu.

Employment-June 2013Summary

With the summer building season underway, the nation’s construction industry added 7,000 jobs in May as the unemployment rate dipped to 10.8 percent, which is down from 13.2 percent in April and the lowest rate since October 2008, according to U.S. Labor Department. Since May 2012, the industry added 189,000 jobs, or 3.4 percent.

Despite gains in every other construction sector, the nonresidential building sector lost 2,600 jobs for the month. Year-over-year, the sector added 15,300 jobs, or 2.3 percent. Nonresidential specialty trade contractors added 1,200 jobs in May and netted 51,600 workers, or 2.5 percent, since the same time last year. Heavy and civil engineering employment rose by 3,100 jobs in May and increased by 28,600 jobs, or 3.3 percent, from May 2012.

In contrast, the residential sector added 900 jobs for the month and 18,100 jobs, or 3.2 percent, during the last year. Residential specialty trade contractors added 4,600 workers for the month and 76,300 workers, or 5.2 percent, on a year-over-year basis.

Overall, the nation added 175,000 jobs as the private sector expanded by 178,000 jobs and the public sector shrunk by 3,000 jobs. The national unemployment rate was 7.6 percent in May, up from 7.5 percent in April, but down from 8.2 percent compared to the same time last year.

Analysis

“Much of the growth in construction continues to be in residential building, as indicated in the addition of 76,300 residential specialty trade contractors during the past year,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Last month, that sector added 4,600 jobs, representing nearly two-thirds of total construction growth.

“In contrast, other construction segments have not been rebounding nearly as rapidly,” added Basu. “Nonresidential building construction actually lost 2,600 jobs last month.

“Job growth has apparently been inadequate to foment robust nonresidential construction recovery,” Basu remarked. “This may be due to a number of factors, including still high vacancy rates in a number of different product categories.

“The mix of jobs has also likely played a major role, with many of the jobs added being temporary,” stated Basu. “Temporary workers are far less likely to induce new construction than the addition of permanent workers. The trend toward elevated temporary hiring is likely to continue over the next several months as many employers learn more about the implication of the Patient Protection and Affordable Care Act on their future health care costs.

“One bit of good news for the nonresidential construction segment was the addition of 3,100 jobs last month in heavy and civil engineering construction,” Basu said. “Healthy job performance in this segment is often considered a leading indicator for a number of other construction segments.

“The hope is that this number, in conjunction with overall economic expansion, will ultimately produce a more sustained and more robust nonresidential construction recovery in the months ahead,” Basu concluded.

To view the previous Employment report, click here

ABC Reports: Nonresidential Construction Spending Increases 0.7 Percent In April

Published on June 3, 2013 in Daily Dirt and National. Closed Tags: , , , , , , , .

CEU2“The implication is that nonresidential construction spending will continue to recover, but only gradually.” —ABC Chief Economist Anirban Basu.

Construction Spending-June 2013Summary

After a disappointing March, the nation’s nonresidential construction industry bounced back moderately in April. According to the June 3 release by the U.S. Census Bureau, nonresidential construction spending increased 0.7 percent in April, with outlays increasing to a seasonally adjusted annualized rate of $552.45 billion. However, nonresidential construction spending is down 2.1 percent from one year ago.

Privately financed projects primarily drove spending gains in April, with private nonresidential construction spending rising 2.2 percent for the month and 0.6 percent on a year-over-year basis. Public nonresidential construction spending dipped 1.1 percent for the month and is down 5.2 percent compared to April 2012.

Eight of the sixteen nonresidential construction sectors posted increases in spending for the month, including power, up 7.8 percent; sewage and waste disposal, up 7.7 percent; and public safety, up 5.6 percent. Spending in other growth sectors was up less than 1 percent. Five sectors have registered increases in spending on a year-over-year basis, including lodging, up 16.6 percent; transportation, up 11.4 percent; manufacturing, up 2.1 percent; commercial, up 1.9 percent; and office, up 1.6 percent.

In contrast, eight nonresidential construction sectors experienced spending declines for the month, with the largest decreases were in religious, down 11.3 percent; conservation and development, down 5.6 percent; and communications, down 4.6 percent. Sectors recording the largest losses from one year ago include conservation and development, down 11.5 percent; educational, down 10.7 percent; and amusement and recreation, down 10.5 percent.

Residential construction spending slipped 0.2 percent for the month, but is up 18.3 percent from the same time last year. Total construction spending–which includes both nonresidential and residential spending–was up 0.4 percent for the month and is up 4.3 percent from April 2012.

Analysis

“The dominant theme associated with today’s report on the nation’s nonresidential construction industry continues to be slow and steady,” said Associated Builders and Contractors Chief Economist Anirban Basu. “While weather and other factors can impact monthly performance, the industry continues to be poised for slow spending growth.

“Nonresidential construction tends to lag the performance of the overall economy,” added Basu. “The broader economy continues to expand at a roughly 2 percent pace and is closing in on completing four years of economic recovery. The implication is that nonresidential construction spending will also continue to recover, but only gradually.

“In the larger context, at least four aspects of the broader economy that are expanding more briskly than construction,” Basu stated. “These include energy production, housing, consumer spending on automobiles and financial markets.

“The performance of these economic segments helps explain the increase in spending observed over the past year in categories such as power, commercial, lodging and office,” said Basu. “With consumer spending continuing to rise and the nation continuing to add jobs each month, the expectation is that these and many other private segments will continue to recover over the course of 2013.

“Meanwhile, weak state and local government budgets continue to plague the recovery,” Basu remarked. “Though some state budgets have improved materially in recent years, many states continue to wrestle with long-term deficits in their pension and healthcare funds, which will continue to suppress public construction investment in the near future.”

To view the previous Spending report, click here.

ABC Reports: FIRST QUARTER 2013 CBI DECLINES 1.1 PERCENT, NATION’S NONRESIDENTIAL CONSTRUCTION ACTIVITY REMAINS SPORADIC

Published on May 22, 2013 in Daily Dirt. Closed Tags: , , , , , , , , , , , , , , , , , .

Construction_Backlog_Indicator(2)Associated Builders and Contractors (ABC) today reports that its Construction Backlog Indicator (CBI) remained unchanged at 8 months from the third quarter through the fourth quarter of 2012; however, it is up 2.4 percent compared to a year ago. CBI is measured in months and reflects the amount of construction work under contract, but not yet completed by nonresidential contractors.

“As with the broader economic recovery, the rebound of the nation’s nonresidential construction industry remains sporadic and stymied by a myriad factors, including tight credit, heightened caution among private developers and public policymakers, and a still struggling global economy,” stated ABC Chief Economist Anirban Basu.

“Because a growing number of projects are now in various stages of planning, the expectation is that backlog will expand moderately later in 2013, but construction volumes will be roughly flat for the balance of the year,” Basu said.

“Certain nonresidential construction segments, such as energy generation, infrastructure, retail and lodging, appear to be doing well,” remarked Basu. “But, this activity alone is not enough to counter the poor performance of other construction sectors, and is unable to expand rapidly in the absence of a dynamic economic recovery.

CBI Map of Regions and Backlog Months: Q4 2011 v. Q4 2012

To read more about the 2013 1st Quarter CBI, click here.

To view the charts and graphs, click here.

Construction Materials Prices Down 0.1 Percent In April

Published on May 15, 2013 in Daily Dirt and National. Closed Tags: , , , , , , , , , .

CEU2“Contractors should not be surprised if nonresidential construction materials prices bounce back significantly over the next several months.” —ABC Chief Economist Anirban Basu.

Producer Prices-May2013Summary

National construction materials prices slipped 0.1 percent in April, according to the May 15 producer price report by the U.S. Department of Labor. Year over year, construction materials prices are up just 0.4 percent. Nonresidential construction materials prices decreased 0.1 percent for the month and are down 0.4 percent over the last 12 months.

Nonferrous wire and cable prices dropped 3.5 percent for the month and are down 4.2 percent on a year-over-year basis. Prices for plumbing fixtures and fittings slipped 0.5 percent compared to March, but are 0.8 percent higher than April 2012 prices. Prices for fabricated structural metal products decreased 0.4 percent for the month and are down 0.9 percent compared to one year ago. Iron and steel prices slipped 0.3 percent in April and are 9.3 percent lower from the same time last year. Steel mill product prices are an exception to the trend for metal prices, as they increased 0.4 percent for the month but remain 8.9 percent lower than the same time last year.

In contrast, crude energy prices increased 3.7 percent as natural gas prices jumped 15.5 percent. Year over year, crude energy prices are up 8.4 percent. Softwood lumber prices continue to climb and are up 2.5 percent for the month and 33.1 percent during the past 12 months. Prices for prepared asphalt, tar roofing, and siding increased 2.1 percent in April and are 6 percent higher compared to the same time last year. Prices for concrete products increased 1.1 percent compared to last month and are 3.2 percent higher from one year ago.

Overall, the nation’s wholesale goods prices decreased 0.7 percent in April—the largest drop in three years—but are 0.7 percent higher compared to April 2012.

Analysis

“Once again, the headline number for nonresidential construction materials prices remains benign,” stated Associated Builders and Contractors Chief Economist Anirban Basu. “Over the past six months, the monthly percentage changes in nonresidential materials prices have shown little movement.

“However, beneath the headline numbers is some emerging volatility that should concern contractors,” said Basu. “This volatility is not necessarily associated with rising prices, but rather with expanding monthly fluctuation that may render bidding projects more difficult.

“In the most recent month, materials prices would have actually fallen significantly except for an increase in energy prices,” Basu remarked. “In recent weeks, commodity prices have generally been weaker, a reflection of a soft global economy still prone to bouts of weakness.

“Economic growth in China now appears to be firming and Japanese economic activity is accelerating, which would tend to be consistent with future materials price increases,” added Basu. “In addition to a shifting global outlook is the impact of central bank policy around the world. Many central banks are now following the lead of America’s Federal Reserve by lowering interest rates and increasing money supplies—a policy environment that is more likely to be associated with both volatile and rising materials prices.

“Only time will tell if materials prices generally remain lower,” said Basu. “However, contractors should not be surprised if nonresidential construction materials prices bounce back significantly over the next several months.”

To view the previous Producer Prices report, click here.

ABC Reports: Construction Loses 6,000 Jobs In April

Published on May 9, 2013 in Daily Dirt and National. Closed Tags: , , , , , , , , .

CEU2“Today’s employment report reinforces the notion that sustained recovery remains elusive.” —ABC Chief Economist Anirban Basu.

Employment - May 2013Summary

The U.S. construction industry lost 6,000 jobs in April, according to the May 3 employment report by the U.S. Department of Labor, but the unemployment rate decreased to 13.2 percent, down from 14.7 percent in March and 14.5 percent in April 2012. Year over year, the construction industry has added 154,000 jobs, or 1.7 percent. The decline in unemployment is likely due to seasonality rather than meaningful improvement in underlying construction labor market conditions.

The nonresidential building sector lost 4,800 jobs for the month, but has added 17,700, or 2.7 percent, over the last year. The residential building sector added 6,200 jobs in April and has added 14,400 jobs, or 2.5 percent, year over year.

Nonresidential specialty trade contractor employment fell by 11,100 jobs in April compared to March, but is still up by 39,000 jobs, or 1.9 percent, compared to the same time last year. Residential specialty trade contractors added 7,100 jobs for the month and have added 69,300 jobs, or 4.7 percent, since April 2012. Heavy and civil engineering construction employment slipped by 3,800 jobs in April, but is up by 13,400 jobs, or 1.5 percent, over the last twelve months.

Across all industries, the nation added 165,000 jobs, with the private sector expanding by 176,000 jobs and the public sector shrinking by 11,000 jobs. According to the Bureau of Labor Statistics’ household survey, the national unemployment rate fell to 7.5 percent in April, down from 7.6 percent in March.

Analysis

“Today’s report highlights the fact that different forms of economic activity require different levels of confidence,” said ABC Chief Economist Anirban Basu. “Leading the way in job creation in April were segments such as leisure/hospitality and retail trade. It doesn’t take that much confidence to take a short cruise or eat at a restaurant; however, it takes a considerable level of confidence to move forward with a significant construction project, and that level of confidence is still lacking.

“The recent construction spending report issued by the U.S. Census Bureau showed that both public and private nonresidential construction were down for the month, indicating that sustained momentum continues to elude the industry,” Basu said. “Today’s employment report reinforces the notion that sustained recovery remains elusive. While nonresidential construction employment is up by nearly 56,700 jobs on a year-over-year basis, the segment shed 15,900 positions in April. Further declines are possible in the near-term given weak construction spending dynamics and the anticipated impacts of sequestration on construction starts.

“The longer-term view is somewhat more optimistic,” Basu said. “There are many projects in various stages of planning and the expectation is that the nonresidential construction labor market will strengthen later this year. Leading construction indicators, including ABC’s own Construction Backlog Indicator, have been relatively upbeat lately, suggesting more sustained spending and employment momentum as we approach 2014.”

To view the previous spending report, click here