Tag Archive for 'ABC'

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ABC Reports: Commercial Construction Stagnant In The Final Quarter Of 2012 Likely To Remain Flat For The First Half Of 2013

Published on February 24, 2013 in Daily Dirt and National. 0 Comments 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.

“CBI failed to rise during the fourth quarter of last year, a reflection of numerous factors, including fiscal cliff fears, highly constrained public capital budgets and lackluster macroeconomic growth,” said ABC Chief Economist Anirban Basu. “However, backlog did not decline, suggesting that nonresidential construction spending is likely to remain flat during the initial months of 2013 and then possibly trend higher during the latter part of the year.

“There are myriad sources of risk to the nonresidential construction outlook, including automatic sequestration, which likely would result in a pullback in federally financed construction projects, Basu said. “As the president and Congress struggle to agree on ways to reduce the federal government’s large deficits, this debt presents major issues for contractors in the form of higher future interest rates and slower long-term expansion.”

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

CBI_q412 (3) To read more about the 2012 4th Quarter CBI, click here.

ABC Reports: Construction Adds 28,000 Jobs In January, But Unemployment Increases To 16.1 Percent

Published on February 1, 2013 in Daily Dirt and National. 0 Comments Tags: , , , , , , , , , .

CEU2“Winter months are notoriously seasonal and subject to construction employment fluctuation based on weather patterns as opposed to economic forces.” —ABC Chief Economist Anirban Basu.

Employment - February 2013Summary

Despite the addition of 28,000 jobs in January, the nation’s construction industry unemployment rate shot up to 16.1 percent, according to the Feb. 1 employment report by the U.S. Department of Labor. The January rate marks an increase from 13.5 percent in December 2012, but a decrease from 17.7 percent the same time last year. Year over year, construction employment has risen by 102,000 jobs, or 1.8 percent.

The nonresidential building sector lost 2,700 jobs in January, but has added 6,900 jobs, or 1 percent, during the past year. The residential building sector added 700 jobs for the month and has added 2,500 jobs, or 0.4 percent, during the past 12 months.

Nonresidential specialty trade contractors gained 12,400 jobs since December and 15,500, or 0.7 percent, compared to the same time one year ago. Residential specialty trade contractors added 13,800 for the month and 50,700 jobs, or 3.5 percent, for the past 12 months. Employment for heavy and civil engineering construction increased by 4,000 jobs for the month and has added 26,500 jobs, or 3.5 percent, since January 2012.

Overall, the nation added 157,000 jobs as the private sector expanded by 166,000 jobs and the public sector shrunk by 9,000 jobs. According to the Bureau of Labor Statistics’ household survey, the national unemployment rate increased to 7.9 percent in January, up from 7.8 percent in December.

Analysis

“For a second consecutive month, the nation’s construction industry added jobs,” said Associated Builders and Contractors Chief Economist Anirban Basu. “However, there are at least two reasons to question whether this improved performance is indicative of a broadening construction industry recovery or an example of the statistics being impacted by temporary phenomena.

“First, winter months are notoriously seasonal and subject to construction employment fluctuation based on weather patterns as opposed to economic forces,” Basu stated. “Second, some of the acceleration in construction hiring is likely due to ongoing Hurricane Sandy rebuilding, which presumably will only create a temporary increase in construction activity.

“In addition, nonresidential building construction actually lost 2,700 jobs in January, reflecting a modest pace of economic expansion,” said Basu. “In fact, the most recent gross domestic product data indicates the nation’s expansion has become nonexistent, rather than modest.

“While fourth quarter output was impacted by a sharp decline in military outlays and negative adjustments to inventory, the data shows that economic activity is unlikely to accelerate meaningfully during the months ahead,” said Basu. “The economy entered 2013 with precious little momentum, and now has to adjust to a set of higher tax rates.

“Financial markets generally have shrugged off these factors, yet surveys of business and consumer confidence indicate most Americans remain intensely nervous,” Basu said. “Additionally, battles over the debt limit and spending cuts loom in the next few months, which may further strain any economic recovery.”

To view the previous Employment report, click here.

ABC Reports: Nonresidential Construction Spending Increases 0.3 Percent In December

Published on February 1, 2013 in Daily Dirt and National. 0 Comments Tags: , , , , , , , .

CEU2“It may be tempting for some to attribute recent progress in nonresidential spending to Hurricane Sandy reconstruction, but an analysis of the data suggests the ongoing recovery is significantly broader than these rebuilding efforts.” —ABC Chief Economist Anirban Basu.

Spending - February 2013 (3) Summary

The nation’s nonresidential construction spending increased 0.3 percent in December, with outlays increasing to a seasonally adjusted annual rate of $570.4 billion, according to the Feb. 1 report by the U.S. Census Bureau. Year over year, total nonresidential construction spending is up 1.2 percent.

The increase in spending was driven by private nonresidential construction, which rose 1.8 percent for the month and was 7.6 percent higher than the same time last year. Public nonresidential construction spending fell 1.4 percent in December and is 5.3 percent lower than the same time last year.

Ten of 16 nonresidential construction subsectors posted increases for the month. The largest gains were in conservation and development, up 3.6 percent; manufacturing, up 2.5 percent; and office, up 2 percent. Five subsectors posted increases in spending on a year-over-year basis, including lodging, up 16.1 percent; transportation, up 13.9 percent; and power, up 11.2 percent.

Six of the 16 subsectors experienced spending cuts in December. The three largest declines were sewage and waste disposal, down 8.4 percent; water supply, down 3.1 percent; and transportation, down 1.9 percent. Year over year, 11 subsectors reported spending decreases, including sewage and waste disposal, down 12.9 percent; public safety, down 12.7 percent; religious, down 10.1 percent; and conservation and development, down 9.3 percent.

Residential construction spending increased 2.1 percent for the month and is up 22.3 percent compared to the same time last year.

Total construction spending—which encompasses both nonresidential and residential spending—was up 0.9 percent for the month and is 7.8 percent higher than December 2011.

Analysis

“Nonresidential construction activities in December appear to confirm the notion that the nation remains in recovery, despite news that gross domestic product turned negative during last year’s fourth quarter,” said Associated Builders and Contractors Chief Economist Anirban Basu. “While the pace of nonresidential construction recovery remains moderate, there is little indication that the recovery has stalled altogether.

“It may be tempting for some to attribute recent progress in nonresidential spending to Hurricane Sandy reconstruction, but an analysis of the data suggests the ongoing recovery is significantly broader than these rebuilding efforts,” Basu said.

“Specifically, the monthly growth in manufacturing and office-related construction indicates ongoing recovery in segments unlikely to be substantially associated with damage in New York, New Jersey and elsewhere in the Northeast,” said Basu. “However, some of the expansion in spending in the conservation and development categories may be related to the hurricane.

“The pattern of expansion in primarily privately financed segments accompanied by declines in primarily publicly financed segment continues,” Basu stated. “Job loss and declining spending continue to be associated with local governments around the country, and tight fiscal circumstances continue to be reflected in weak monthly performance in categories such as water supply and sewage and waste disposal.

“This pattern is likely to continue going forward, with spending in local government continuing to serve as a drag on macro-regional economies,” said Basu. “As reflected in the fourth quarter gross domestic product report, many federal agencies have reduced outlays, which is likely to result in slower overall economic growth as well as diminished demand for construction in key publicly financed segments.”

To view the previous Spending report, click here.

Construction Confidence Dips in Second Half of 2012

Published on January 22, 2013 in Daily Dirt and National. 0 Comments Tags: , , , , , , , .

image001 Associated Builders and Contractors (ABC) today released its Construction Confidence Index (CCI) for the second half of 2012. The CCI reflects three aspects of the U.S. nonresidential construction industry: sales prospects, staffing levels and profit margins.

“Last year, the biggest issue was the fiscal cliff,” said ABC Chief Economist Anirban Basu. “This year, worries likely will stem from a combination of unresolved fiscal cliff issues and another potentially intense debt ceiling debate.

“A strong construction market requires capital, confidence and conditions consistent with demand for construction,” Basu said. “While capital and conditions have been improving steadily in conjunction with the broader economy, confidence continues to lag.

“The ongoing lack of confidence, including among those who would otherwise purchase construction services, continues to produce small and halting gains in nonresidential construction spending,” said Basu. “Though index values for sales, profit margins and staffing levels remained above 50 during the second half of 2012—indicating industry growth—confidence was lower overall.”

  • Sales expectations fell from 66.3 to 62.3
  • Profit margins dropped from 56.3 to 55.9
  • Staffing levels declined from 62.2 to 59.6

image002

 To read the full CCI report, click here.

Associated Builders and Contractors (ABC) is a national association with 72 chapters representing 22,000 merit shop construction and construction-related firms. Visit us at www.abc.org.

ABC Reports: Construction Materials Prices Fall 1.1 Percent In November

Published on December 13, 2012 in Daily Dirt and National. 0 Comments Tags: , , , , , , , , , , , , , .

CEU2 “Investors may be reducing their positions in economically sensitive commodities in response to fears regarding America’s fiscal cliff.” —ABC Chief Economist Anirban Basu.

Producer Prices - December 2012Summary

In a sign of a weak global economy, the nation’s construction materials prices fell 1.1 percent in November—the largest monthly decrease since February 2009—according to the producer price index report by the U.S. Department of Labor. However, prices are 1 percent higher than the same time last year.

Nonresidential construction materials prices dipped 1.3 percent for the month, but are up 0.6 percent on a year-over-year basis.

Prices for steel mill products decreased 1.3 percent for the month and are down 9.1 percent compared to one year ago. Nonferrous wire and cable prices were down 1.2 percent compared to October and were down 3.8 percent from the same time last year. Prices for prepared asphalt, tar roofing and siding slipped 0.5 percent for the month, but were 1.4 percent higher than in November 2011. Prices for concrete products were unchanged for the month and increased 2 percent since the same time last year. Prices for plumbing fixtures and fittings were unchanged for the month and were 1.6 percent higher than one year ago.

In contrast, softwood lumber prices jumped 5.3 percent for the month after dipping 2.7 percent in October. Year over year, softwood lumber prices are up 13.7 percent. Iron and steel prices increased 1.8 percent for the month, but were down 7.9 percent during the past 12 months. Prices for fabricated structural metal products inched up 0.2 percent for the month are up 0.4 percent year over year.

Crude energy materials prices decreased 0.7 percent in November, driven by a 7.5 percent drop in crude petroleum prices. Year over year, crude energy materials prices are down 9.5 percent.

Overall, the nation’s wholesale goods prices fell 0.8 percent in November, but are 1.4 percent higher than the same time last year.

Analysis

“One of the advantages of a weak global economy is that demand growth is suppressed, which results in smaller price increases,” said Associated Builders and Contractors Chief Economist Anirban Basu. “This past month, prices actually declined, perhaps a reflection of weaker performance in certain Asian economies, as well as ongoing slowing in parts of Latin America and throughout Europe.

“Investors also may be reducing their positions in economically sensitive commodities in response to fears regarding America’s fiscal cliff,” Basu said. “If America falls off its fiscal cliff, it will slow both the U.S. and global economies, resulting in less demand for steel, petroleum and other inputs.

“Given elevated levels of geopolitical uncertainty, contractors can expect greater volatility in materials prices in 2013 compared to 2012,” said Basu. “With construction materials prices up 1 percent in the past year, it is unlikely prices will remain as sustained in 2013 given a host of political and economic considerations. Accordingly, contractors will need to be more careful in their contractual dealings next year over the concern of unexpected price hikes.”

To view the previous PPI report, click here.