Tag Archive for 'Associated Builders and Contractors'
“The U.S. economy has performed handsomely over the past nine months, according to most metrics, and conventional wisdom suggests that it can continue to expand at or above trend rates of growth.”—ABC Chief Economist Anirban Basu
Construction input prices dipped 1.4 percent during the final month of 2014 and are down nearly 1 percent on a year-over-year basis, according to the Jan. 15 producer price index release from the U.S. Department of Labor. Inputs to nonresidential construction fell even farther, down 1.7 percent for the month and 1.9 percent year over year. December’s report marks the sharpest decline in input prices since late 2008 during the global financial crisis and the fifth consecutive month construction materials prices have failed to rise.
“Without question, financial markets have been unnerved by the recent declines in oil, copper and other commodity prices, although that jitteriness does not necessarily imply a serious economic problem in America,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The fact is the U.S. economy has performed handsomely over the past nine months, according to most metrics, and conventional wisdom suggests that it can continue to expand at or above trend rates of growth despite economic weakening in Europe, China and elsewhere. This is further evidenced by the World Bank’s recent downgrade of its forecasts for global growth in 2015 and 2016, while it upgraded its outlook for the United States.
“Overall, the view that U.S. domestic demand for construction services and most other services continues to expand is consistent with the fact that some domestically produced and consumed materials actually registered price increases last month,” said Basu. “Note that concrete prices are up by 5 percent on a year-over-year basis while natural gas prices are up by 10 percent.”
The following materials prices increased in December.
- Prices for plumbing fixtures expanded 0.1 percent in December and are up 3.1 percent on a year-over-year basis.
- Concrete products prices expanded 0.7 percent in December and are up 5 percent on a yearly basis.
- Natural gas prices expanded 19.7 percent in December and are 10 percent higher than one year ago.
- Fabricated structural metal product prices grew 0.3 for the month and have expanded 1.5 percent on a year-over-year basis.
Seven of the 11 key construction inputs did not experience price increases for the month.
- Iron and steel prices fell 1 percent in December and are down 3.9 percent from the same time last year.
- Nonferrous wire and cable prices fell 1.6 percent on a monthly basis and 1.5 percent on a yearly basis.
- Prices for prepared asphalt, tar roofing, and siding fell 1 percent for the month but are up 1.9 percent on a year-ago basis.
- Steel mill products prices fell 1.3 percent for the month but are 0.4 percent higher than one year ago.
- Softwood lumber prices fell 1.3 percent in December but are 0.3 percent higher than one year ago.
- Crude petroleum prices fell 18.9 percent in December and are down 37.1 percent from the same time last year.
- Crude energy materials prices fell 4.7 percent in December but are 19.6 percent lower year-over-year.
To view the previous PPI report, click here.
“Nonresidential construction added nearly 5,000 jobs in November and the outlook remains positive.”—ABC Chief Economist Anirban Basu.
The U.S. construction industry added 20,000 jobs in November, with nonresidential construction contributing 4,900 of them, according to the Bureau of Labor Statistics preliminary estimate released Dec. 5. October’s overall construction estimate was revised downward from 12,000 to 7,000 net new jobs and nonresidential construction lost 2,100 jobs in October, after revisions.
“Nonresidential construction added nearly 5,000 jobs in November and the outlook remains positive,” said Associated Builders and Contractors Chief Economist Anirban Basu. “It is important to note that the greatest constraint on nonresidential job growth may no longer be a lack of demand for construction services, but rather a lack of supply of sufficiently skilled workers. Growing demand for human capital coupled with tighter labor markets strongly suggests that industry wage pressures will expand in 2015, perhaps to the extent that margins will be rendered too thin for many firms, even in the face of rising demand for services.
“While the national construction unemployment rate expanded from 6.4 percent to 7.5 percent on a non-seasonally adjusted basis in November, this is primarily due to seasonal factors,” Basu explained. “The construction unemployment rate has historically expanded during the colder months of the year, and November’s figure should not be seen as a cause for concern.
“The U.S. economy has shifted into a higher gear,” said Basu. “A combination of surging stock prices, lower energy costs, rising consumer confidence, solid job creation, and improvement in the quality of jobs being added has helped move the economy closer to a sustained 3 percent rate of growth. For the most part, this represents good news for the nonresidential construction industry.”
According to the Bureau of Labor Statistics’ household survey, the national unemployment rate remained unchanged at 5.8 percent in November. The labor force once again expanded in October, growing by 119,000 persons. After shrinking in August and September, the labor force has now expanded in consecutive months. The labor force participation rate remained unchanged at 62.8 percent in November.
Construction employment for the month and the past year breaks down as follows:
- Nonresidential building construction employment fell by 2,400 jobs for the month but is up by 9,500 jobs, or 1.4 percent, since November 2013.
- Residential building construction employment expanded by 3,400 jobs in November and is up by 47,300 jobs, or 7.5 percent, on an annual basis.
- Nonresidential specialty trade contractors added 7,300 jobs for the month and employment in that category is up by 47,400 jobs, or 2.2 percent, from the same time one year ago.
- Residential specialty trade contractors gained 13,300 jobs in November and have added 75,500 jobs, or 4.8 percent, since November 2013.
- The heavy and civil engineering construction segment lost 1,300 jobs in November and job totals are up by 33,200, or 3.7, percent on a year-over-year basis.
To view the previous employment report, click here