Tag Archive for 'ABC'

ABC Reports: Construction Materials Prices Inch Higher in June

CEU2“Prices for inputs to construction industries have now risen in five of the year’s first six months.” —ABC Chief Economist Anirban Basu.

PPI July 2014Overall construction materials prices increased by 0.1 percent in June and are up 1.9 percent year over year, according to the July 16 producer price index release by the U.S. Department of Labor. Nonresidential construction materials prices also expanded 0.1 percent for the month and are 1.4 percent higher than one year ago.

“Prices for inputs to construction industries have now risen in five of the year’s first six months,” said Associated Builders and Contractors Chief Economist Anirban Basu. “This marks a significant departure from the previous year’s remarkable stability. Recent monthly gains have been modest—0.1 percent in June and unchanged in May; however, the surprisingly upbeat economic news from China (Chinese GDP grew 7.5 percent in the second quarter), along with a slew of large construction starts in specific regions of the U.S., suggest that prices may continue to rise—albeit modestly— through the second half of 2014.

“A number of international conflicts could apply upward pressure on material prices,” said Basu. “The Middle East is as turbulent as ever and as construction volume increases, any supply-related disruptions could lead to a period of meaningful price inflation.

“The effects of the metal financing scandal at Qingdao port in China—the world’s seventh busiest port— are also yet to be seen,” said Basu. “In May, Chinese authorities launched an investigation into Decheng Mining, a private metals trading firm that used fraudulent warehouse receipts to obtain several loans against a single cargo of metal. As more firms take legal actual against Decheng, we simply do not know the extent to which the financing fraud will impact the metals market.”

Crude energy materials prices expanded 1.2 percent in June and are 6 percent higher than one year ago. Natural gas prices fell by 1.5 percent in June and have now fallen in three of the past four months. Overall, the nation’s wholesale goods prices expanded by 0.4 percent in June and are up 1.9 percent year over year.

The following materials prices increased in June.

Crude petroleum prices increased 3.2 percent in June and are up 5.6 percent from June 2013.

Crude energy materials prices expanded by 1.2 percent in June and are 6.0 percent higher year-over-year.

Softwood lumber prices expanded 2.3 percent and are 7.3 percent higher than one year ago.

Prices for plumbing fixtures expanded 0.4 percent in June and are up 2.4 percent on a year-over-year basis.

Concrete products prices expanded 0.4 percent in June and are up 3.5 percent on a yearly basis.

Steel mill products prices rose 0.5 percent for the month and are 4.1 percent higher than one year ago.

Five of the 11 key construction inputs did not experience price increases for the month.

Prices for prepared asphalt, tar roofing, and siding declined 1 percent for the month and are down 6.6 percent on a year-over-year basis.

Fabricated structural metal product prices remained flat for the month but have increased 1.3 percent on a year-over-year basis.

Iron and steel prices declined 0.2 percent in June but are up 4.6 percent from the same time last year.

Nonferrous wire and cable prices remained flat on a monthly basis but are down 1.6 percent from June 2013.

Natural gas prices shed 1.5 percent in June but are 12.9 percent higher than one year ago.

To view the previous PPI report, click HERE

ABC Reports: Construction Adds Jobs in June but Nonresidential is Sluggish

CEU2“Given that the economy added over 200,000 jobs for the fifth consecutive month in June, there is some optimism about improvement in the second quarter; however, the lack of monthly construction employment growth, particularly in the nonresidential sector, is troubling.”—ABC Chief Economist Anirban Basu.

Employment_7.3The U.S. construction industry added 6,000 jobs in June, according to the Bureau of Labor Statistics (BLS) July 3 report; however, nonresidential construction added only 700 of those jobs and the heavy and civil engineering sector lost 700 jobs.

“Although nonresidential construction’s performance is somewhat disappointing, the general tenor of today’s employment report is upbeat. It is worth noting that nonresidential construction tends to lag that of the overall economy,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Today’s jobs number are largely of a reflection of the softer growth recorded by the U.S. economy for much of last year and during the initial months of 2014.

“Given that the economy added over 200,000 jobs for the fifth consecutive month in June, there is some optimism about improvement in the second quarter; however, the lack of monthly construction employment growth, particularly in the nonresidential sector, is troubling.” said Basu.

“Although the national construction unemployment rate stands at 8.2 percent on a non-seasonally adjusted basis, there are parts of the nation in which unemployment is far lower,” Basu said. “In fact, there are emerging shortages of industrial construction workers in growing segments of the south, which will trigger large increases in wages and per diems during the year ahead. By contrast, there are communities in which construction unemployment remains well above the 8.2 percent average, suggesting that wage inflation will only be meaningfully experienced in certain communities.”

According to the BLS household survey, the national unemployment rate fell to 6.1 percent in June, reaching its lowest level since September 2008. The civilian labor force expanded by 81,000 in June.

Individual sectors saw the following changes:

Nonresidential building construction employment increased by 2,100 jobs for the month but is up by 22,200 jobs, or 3.3 percent, since June 2013.

Residential building construction employment rose by 4,500 jobs in June and is up by 50,600 jobs, or 8.3 percent, on an annual basis.

Nonresidential specialty trade contractors lost 1,400 jobs for the month but employment in that category is up by 29,500 jobs, or 1.4 percent, from the same time last year.

Residential specialty trade contractors gained 2100 jobs in June and have added 55,700 jobs, or 3.6 percent, since June 2013.

The heavy and civil engineering construction segment lost 700 jobs in June but job totals are up by 28,300, or 3.2 percent, on a year-over-year basis.

To view the previous Spending report, click here

ABC Reports: Nonresidential Construction Spending Continues to Expand in May

CEU2“Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”—ABC Chief Economist Anirban Basu.

Spending_7 1Nonresidential construction spending expanded in May for the second consecutive month (based on revised data), according to a July 1 release from the U.S. Census Bureau. Nonresidential construction spending rose 1.1 percent on a monthly basis in May and has increased 6.4 percent on a year-over-year basis. Spending for the month totaled $596.2 billion on a seasonally adjusted, annualized basis. Additionally, nonresidential construction spending for April was revised upward from $570.6 billion to $589.9 billion.

“Nonresidential construction spending is now at its highest level since October 2009, though that does not account for the cost of inflation,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Today’s release helps confirm ABC’s notion that the winter decline in nonresidential construction spending was largely due to unusually harsh weather as opposed to shifting economic fundamentals.”

“ABC’s economic forecast continues to call for ongoing healing in the industry,” said Basu. “Given recent hiccups in U.S. macroeconomic performance, as measured by gross domestic product, and public funding constraints, gradual recovery is perhaps the best the overall industry can anticipate.”

Eleven of 16 nonresidential construction subsectors posted increases in spending in May.

Office-related construction spending grew 0.6 percent in May and is up 18.9 percent from the same time one year ago.

Construction spending in the transportation category expanded 2.2 percent on a monthly basis and has risen 7.5 percent on a year-over-year basis.

Religious spending grew 1.4 percent for the month, but is down 3.9 percent from the same time last year.

Sewage and waste disposal-related construction spending gained 4 percent for the month, but has fallen 1.3 percent on an annual basis.

Amusement and recreation-related construction spending expanded 3.1 percent on a monthly basis and is up 8.5 percent from the same time last year.

Conservation and development-related construction spending increased 1.2 percent for the month and is up 16 percent on a yearly basis.

Highway and street-related construction spending expanded 0.7 percent in May and is up 2.3 percent compared to the same time last year.

Communication construction spending grew 2.3 percent for the month, but is down 1.1 percent from the same time one year ago.

Public safety-related construction spending expanded 0.3 percent on a monthly basis, but has declined 10.9 percent on a year-over-year basis.

Power construction spending grew 3.9 percent for the month and was 25.9 percent higher than the same time last year.

Spending in the water supply category expanded 8.5 percent for the month and is unchanged year over year.

Spending in five nonresidential construction subsectors declined in May.

Manufacturing-related spending fell 1.4 percent on a monthly basis, but is up 6.3 percent compared to the same time last year.

Health care-related construction spending fell 1.6 percent for the month and is down 10.1 percent from May 2013.

Education-related construction spending fell 0.5 percent for the month and is down 0.8 percent on a year-over-year basis.

Commercial construction spending fell 1.1 percent in May, but is up 4.6 percent on a year-over-year basis.

Lodging construction spending is down 1.2 percent on a monthly basis, but is up 11.4 percent on an annual basis.

To view the previous Spending report, click here.

ABC Celebrates Supreme Court’s Recess Appointment Ruling

image007Associated Builders and Contractors (ABC) today celebrated the Supreme Court’s decision in National Labor Relations Board v. Noel Canning that President Obama unconstitutionally bypassed the U. S. Senate by appointing Sharon Block, Richard Griffin and Terrence Flynn to fill National Labor Relations Board (NLRB) vacancies.

“By upholding the U.S. Court of Appeals’ decision, the Supreme Court has reaffirmed the Senate’s role in the executive appointment process,” said ABC Vice President of Government Affairs Geoff Burr. “Today’s ruling overturning President Obama’s illegal recess appointments to the NLRB is a victory for ABC, the Constitution and our system of checks and balances, and it serves as a clear rejection of the president’s unprecedented expansion of executive authority.

The original case was brought by Noel Canning, a Washington state bottling company, which challenged an NLRB decision that it must enter into a collective bargaining agreement with a labor union. The ABC-led Coalition for a Democratic Workplace intervened in the case and, last January, the U.S. Court of Appeals for the D.C. Circuit ruled that the president violated the Constitution when he bypassed the Senate to fill NLRB vacancies.

In addition to reaffirming the legislative branch’s role in the presidential appointee confirmation process, today’s Supreme Court ruling jeopardizes the legal status of more than 1,000 Board actions over the past two years.

ABC Reports: Construction Materials Prices Flat in May

CEU2“Materials prices have been remarkably stable, which fits neatly into the context of soft expansions in both domestic and global construction volume.” —ABC Chief Economist Anirban Basu.

PPI_6 13 14Overall construction materials prices remained flat in May but are up 1.6 percent year over year according to the June 13 Producer Price Index release supplied by the U.S. Department of Labor. Nonresidential construction materials prices fell 0.2 percent for the month but are 1.3 percent higher than at the same time one year ago.

“With construction spending expanding only in fits and starts and given recent evidence of disappointing global economic performance, it comes as little surprise that most construction materials prices are not rising,” said Associated Builders and Contractors Chief Economist Anirban Basu. “For the better part of two years, materials prices have been remarkably stable, which fits neatly into the context of soft expansions in both domestic and global construction volume.”

Crude energy materials prices expanded 2.7 percent in May and are 4.8 percent higher than one year ago. Natural gas prices expanded by 3.4 percent in May after declining significantly during the previous two months. Overall, the nation’s wholesale goods prices remained flat in May and have increased 2.5 percent year-over-year.

“However, the future could be markedly different with the worrisome situation in Iraq causing oil prices to rise,” said Basu. “This price dynamic can impact the prices of other materials, which means that materials price inflation may ensue even in the absence of a meaningful pickup in nonresidential construction activity. The impact of revelations regarding the metal financing scandal in China may also cause materials to become more volatile, but in that case, the impact may actually be to suppress future price increases.”

The following materials prices increased in May.

Crude petroleum prices increased 3.2 percent in May and are up 3.7 percent from May 2013.

Nonferrous wire and cable prices gained 0.5 percent on a monthly basis but are down 2.1 percent from May 2013.

Natural gas prices expanded by 3.4 percent in May and are 13.2 percent higher than one year ago.

Crude energy materials prices expanded by 2.7 percent in May and are 4.8 percent higher year over year.

Seven of the 11 key construction inputs did not experience price increases for the month.

Prices for prepared asphalt, tar roofing, and siding declined 2.1 percent for the month and are down 5.8 percent from the same time last year.

Softwood lumber prices fell 0.2 percent in May and are 0.3 percent lower than one year ago.

Prices for plumbing fixtures remained flat for the month and are up 2 percent on a year-over-year basis.

Fabricated structural metal product prices remained flat for the month and have risen 1.1 percent on a year-over-year basis.

Concrete products prices fell 0.1 percent in May but have increased 3.4 percent from the same time last year.

Iron and steel prices declined 1 percent in May but are up 4.3 percent from the same time last year.

Steel mill products prices fell 0.1 percent for the month but are 3.4 percent higher than one year ago.

To view the previous PPI report, click HERE.