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Construction Materials Prices Rise Only 0.1 Percent In December

CEU2“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis.” —ABC Chief Economist Anirban Basu.

PPI_JanuaryConstruction materials prices expanded just 0.1 percent in December and are up 1.3 percent year over year, according to a Jan. 15 Producer Price Index released by the Department of Labor. Nonresidential construction materials prices also rose only 0.1 percent for the month and are 1 percent higher than the same time one year ago.

“Materials prices continue to be unusually well behaved, neither rising nor falling aggressively on a month-to-month basis,” said Associated Builders and Contractors Chief Economist Anirban Basu. “That said, there was some volatility in individual input segments, including natural gas prices, which were up 7.8 percent, and crude petroleum, which was up 7.1 percent,” Basu said. “These increases are at least partially explained by seasonal factors and do not likely foreshadow aggressive price increases going forward. At the same time, certain input prices fell, including softwood lumber, down 3.3 percent, and nonferrous wire/cable, down 1.4 percent.”

Overall, the nation’s wholesale goods prices expanded 0.4 percent in December and are up 1.2 percent year over year.

“While there is never a guarantee of input price stability, for now things seems reasonably calm,” Baus said. “The world economy is anticipated to accelerate this year to 3.6 percent growth, up from closer to 3 percent last year. That will help push the level of demand for construction materials higher, but not necessarily in ways that are especially damaging to a still-benign U.S. nonresidential construction industry outlook.”

The following materials prices increased in December:

Fabricated structural metal product prices are up 0.1 percent and have risen 0.6 percent on a year-over-year basis.

Natural gas prices rose 7.8 percent in December and are 4.9 percent higher than one year ago.

Natural gas prices rose 7.8 percent in December and are 4.9 percent higher than one year ago.

Crude energy prices grew 4.8 percent in December and are 4.4 percent higher year over year.

Iron and steel prices expanded 1.6 percent in December but are down 5.9 percent from the same time last year.

Prices for plumbing fixtures and fittings rose 0.1 percent for the month and are up 1.6 percent on a year-over-year basis.

Steel mill products prices expanded 0.3 percent for the month but are 6.3 percent lower than one year ago.

A number of key construction inputs did not experience price increases for the month:

Prices for prepared asphalt, tar roofing and siding declined 0.8 percent for the month but are up 3.6 percent from last year.

Concrete products remained flat in December but are up 2.3 percent year over year.

Nonferrous wire and cable prices shed 1.4 percent on a monthly basis and are down 3.4 percent from December 2012.

Softwood lumber prices fell 3.3 percent for the month but are 6.6 percent higher than one year ago.

To view the previous Producer Price Index report, click here.

Nonresidential Construction Employment Declines In December

CEU2“It is discouraging to observe losses in momentum in both the broader economy and in nonresidential construction; however construction-specific and economy-wide employment data are likely to improve in the months ahead.”—ABC Chief Economist Anirban Basu.

Employment-January2014National construction employment decreased by 16,000 jobs in December, according to a Jan. 10 report by the U.S. Department of Labor. Nonresidential construction registered the bulk of job losses, contributing 88.1 percent of total construction industry job loss and losing 14,100 positions on a monthly basis.

The national construction unemployment rate grew to 11.4 percent on a non-seasonally adjusted basis compared to 8.6 percent in November and 13.5 percent one year ago.

“It is discouraging to observe losses in momentum in both the broader economy and in nonresidential construction; however construction-specific and economy-wide employment data are likely to improve in the months ahead,” said Associated Builders and Contractors Chief Economist Anirban Basu.

Across all industries, the nation added 74,000 jobs in December, with the private sector gaining 87,000 jobs and the public sector losing 13,000 jobs. According to the Bureau of Labor Statistics’ household survey, the national unemployment rate fell from 7 percent in November to 6.7 percent in December—the lowest unemployment rate since October 2008. Unfortunately, the unemployment decline is largely due to the labor force participation rate dipping back to its cyclical October 2013 low of 62.8 percent. Labor force participation is now at its lowest rate since March 1978.

“Compounding the gloomy jobs number and the historically low labor participation rate, long-term unemployment reached 3.9 million, or 37.7 percent of the labor force,” Basu said. “While this is below the post-recession peak, it is still the higher than at any other time in the past 60 years.

“A vast majority of the jobs added in December originated in low-wage sectors,” said Basu. “Leisure and hospitality, retail trade, and temporary help services accounted for 104,700 new jobs, or 141 percent of the monthly gain. Today’s jobs report shows that the U.S. economy is not quite ready to take off.”

Nonresidential building construction employment fell by 1,200 jobs for the month but is up by 10,000 jobs (1.5 percent) since December 2012.

Residential building construction employment rose by 4,800 jobs in December and is up by 26,800 jobs (4.7 percent) on an annual basis.

Nonresidential specialty trade contractors lost 12,900 jobs for the month, but employment is up by 11,600 jobs (0.5 percent) from the same time last year.

Residential specialty trade contractors gained 1,400 jobs in December and have added 73,000 jobs (4.9 percent) from December 2012.

Heavy and civil engineering construction lost 8,800 jobs in December, but segment job totals are up by 500 (0.1 percent) on a year-over-year basis.

To view the previous Employment report, click here.

Nonresidential Construction Spending Returns To Normal After Government Shutdown

CEU2“The recent acceleration in economic activity sets the stage for a much better 2014, both for the broader economy and the nonresidential construction industry.” —ABC Chief Economist Anirban Basu

Spending_1Nonresidential construction spending grew 0.6 on a monthly and yearly basis in November 2013, according to the Jan. 2 release by the U.S. Census Bureau. In November, spending totaled $583.436 billion on a seasonally adjusted, annualized basis.

“Construction activity bounced back in November, due in part to the end of the federal government shutdown and an accompanying return to normalcy,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Nonresidential construction spending was up 2.3 percent on a seasonally adjusted basis compared to September, which makes a better comparison because October was so unusual.

“The recent acceleration in economic activity sets the stage for a much better 2014, both for the broader economy and the nonresidential construction industry,” said Basu. “We can expect nonresidential construction spending to expand during the first half of the year.”

Seven of the 16 nonresidential construction subsectors posted spending increases in November:

Religious spending grew 0.6 percent for the month, but is down 5.6 percent from the same time last year.

Education-related construction spending expanded 0.2 percent for the month and is up 1.3 percent on a year-over-year basis.

Commercial construction spending grew 4.5 percent in November and is up 17.4 percent on a yearly basis.

Communication-related construction spending expanded 10.9 percent for the month but is down 10.7 percent compared to November 2012.

Office construction spending was up 2.6 percent in November and is 5.6 percent higher than the same time last year.

Construction spending in the power category grew 3 percent on a monthly basis but fell 21.4 percent on an annual basis.

Manufacturing construction spending expanded 0.6 percent in November and is up 14.4 percent compared to the same time one year ago.

Spending declined in nine nonresidential construction subsectors in November:

Public safety-related construction spending fell 0.3 percent, but has grown 2.5 percent on a year-over-year basis.

Amusement and recreation-related spending was down 0.6 percent on a monthly basis, but has expanded 5.5 percent from the same time last year.

Conservation and development spending was down 4.7 percent for the month, but is up 0.1 percent for the year.

Lodging spending fell 0.2 percent on a monthly basis but is up 31.2 percent on a year-over-year basis.

Water supply spending declined 3.7 percent for the month but is 2 percent higher than the same time last year.

Health care-related construction spending was down 2.8 percent for the month and is down 0.3 percent for the year.

Sewage and waste disposal-related construction spending declined 8 percent for the month and has fallen 5.9 percent on a 12-month basis.

To view the previous Spending report, click here

ABC Reports: Construction Materials Prices Remain Stable In November

CEU2“November represented another month of remarkable stability for construction input prices.” —ABC Chief Economist Anirban Basu.

PPI-December_2013Overall, construction materials prices fell 0.5 percent in November and are up only 1.1 percent year over year, according to the Department of Labor’s Dec. 13 Producer Price Index. Nonresidential construction materials are down 0.6 percent for the month and are 0.7 percent lower than the same time last year.

“November represented another month of remarkable stability for construction input prices,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu.

“Although many investors predicted significant inflation this year due to expansionary monetary policies in much of the developed world, there continues to be a lack of significant inflationary pressures both globally and nationally.”

Overall, the nation’s wholesale goods prices expanded 0.2 percent in November, but are down 0.9 percent year over year.

“Next year is unlikely to offer as much stability as 2013,” Basu said. “Global economic growth is set to accelerate and the apparent budget deal in Congress should produce greater certainty among businesses, helping improve an already benign national economic forecast. Tension in the Middle East also continues to be a consideration. Together, these factors suggest materials price increases may be at least slightly more rapid in 2014.”

The following materials prices increased in November:

•Fabricated structural metal products were up 0.1 percent for the month and 0.3 percent year over year.

•Softwood lumber prices increased 2.6 percent on a monthly basis and are up 12.8 percent year over year.

•Natural gas prices were up 1.9 percent for the month and 3.3 percent on an annual basis.

• Nonferrous wire and cable prices rose 0.2 percent on a monthly basis and are down 3 percent year over year.

•Iron and steel prices were up 1.8 percent for the month and are down 0.1 percent compared to the same time last year.

•Prices for plumbing fixtures and fittings inched up 0.1 percent in November and are up 1.6 percent year over year.

•Steel mill products prices increased 0.8 percent in November but are down 0.6 percent compared to the same time last year.

The following construction inputs experienced price decreases in November:

•Prepared asphalt, tar roofing and siding prices were down 3.8 percent for the month and 0.3 percent year over year.

•Crude petroleum prices fell 10.3 percent on a monthly basis but are up 0.9 percent year over year.

• Crude energy prices decreased 5.7 percent in November but are up 0.6 percent compared to the same time last year.

•Concrete products prices were flat in November and are up 2.8 percent year over year.

To view the previous Producer Price Index report, click here.

ABC Reports: Nonresidential Construction Continues To Gain Jobs In November

CEU2“November is the third consecutive month nonresidential construction experienced job growth, which is positive after seeing losses April through August.”—ABC Chief Economist Anirban Basu.

Employment - December 2013National construction employment expanded by 17,000 jobs in November, according to a Dec. 6 report by the U.S. Department of Labor. Nonresidential construction added 7,700 positions on a monthly basis, contributing nearly half (45.2 percent) of the overall gain in construction employment.

The national construction unemployment rate was 8.6 percent on a non-seasonally adjusted basis, down from 9 percent in October and 12.2 percent one year ago.

“It is encouraging to see nonresidential construction employment build on the momentum experienced in September and October,” said Associated Builders and Contractors Chief Economist Anirban Basu. “November is the third consecutive month nonresidential construction experienced job growth, which is positive after seeing losses April through August.”

Across all industries, the nation added 203,000 jobs. The private sector expanded by 196,000 jobs and the public sector gained 7,000 jobs. According to the Bureau of Labor Statistics’ household survey, the national unemployment rate fell to 7 percent in November, down from 7.3 percent in October. This represents the lowest unemployment rate since November 2008. However, this is partially due to a dismal 63 percent labor force participation, which is only a slight rebound from October’s historic low of 62.8 percent.

“Despite the increase in November, labor force participation is still down compared to before the government shutdown,” Basu said. “This helps explain one of the economy’s central contradictions: a growing lack of available construction workers in parts of the country in the midst of a soft labor market.

“Despite these problematic labor force dynamics, there was significant improvement in the types of jobs gained in November,” said Basu. “For example, leisure and hospitality and retail trade, two low-wage sectors, accounted for nearly half of October’s job growth. But in November, the sectors accounted for less than 20 percent of new jobs.”

Every construction segment produced additional employment opportunities in November.

• Nonresidential building construction employment rose by 2,300 jobs for the month and is up by 19,900 jobs, or 3 percent, since November 2012.

• Residential building construction employment grew by 1,300 jobs in November and is up 21,300 jobs, or 3.7 percent, on an annual basis.

• Nonresidential specialty trade contractors added 5,400 jobs for the month and have gained 39,500 jobs, or 1.9 percent, since the same time last year.

• Residential specialty trade contractors gained 7,100 jobs in November and have added 81,200 jobs, or 5.4 percent, since November 2012.

• Heavy and civil engineering construction added 200 jobs in November and is up by 15,600 jobs, or 1.8 percent, on a year-over-year basis.

To view the previous Employment report, click here.