Tag Archive for 'Associated Builders and Contractors'

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ABC Reports: February Construction Unemployment Rates Improve in 41 States from 2015

NRAnalysis by Bernard Markstein, Ph.D.

Temperatures remained above normal for much of the country in February. However, precipitation rates were also above normal for much of the East and below normal for much of the West and parts of the South. These factors contributed to the not seasonally adjusted (NSA) construction unemployment rates for the nation maintaining a low February rate of 8.7 percent, a slight rise from January’s similarly low 8.5 percent rate. It was also the second lowest February national construction unemployment rate going back to the beginning of the series in 2000, surpassed only by the 8.6 percent rate in February 2006.

The NSA construction unemployment rates for the country and 41 states were lower than in February 2015. February’s 1.9 percent year-over-year improvement continues the streak of year-over-year NSA construction unemployment rate declines dating back to October 2010. On a year-over-year basis, February national NSA employment in construction increased by 253,000.

Note that the NSA unemployment rates have a seasonal pattern with the national NSA construction unemployment rate often increasing from January to February. However, 22 states posted a decrease in their rate from January and two states (Florida and Kansas) had no change in their rate.

View states ranked by their construction unemployment rate.

View states ranked by their year-over-year improvement in construction employment.

The Top Five States

The five states with the lowest construction unemployment rates in February in order from lowest rate to highest were:

  1.  Georgia
  2.  Colorado
  3.  Hawaii*
  4.  Virginia
  5.  Texas

* Unemployment rate is for construction, mining, and logging combined

Four states—Colorado, Georgia, Texas and Virginia—were also among the top five in January. Georgia, with a 4.8 percent estimated construction unemployment rate in February, had the lowest rate for the third consecutive month.

Colorado and Hawaii came in a close second with a 4.9 percent construction unemployment rate. Posting a one percent decline in its construction unemployment rate from January, Colorado improved from third lowest that month. Hawaii also experienced a drop in its rate from January—down 1.5 percent, the third largest monthly decline among the states. That moved Hawaii up from the sixth lowest rate in January, tied with North Carolina. Hawaii also had the second largest year-over-year drop in its rate, down 4.5 percent.

Virginia saw a reduction in its construction unemployment rate in January from 6.1 percent rate (based on revised data) to 5.3 percent in February. That left the state with the fourth lowest rate for the second month in a row.

Texas slid from second lowest in January to fifth lowest in February with a 5.7 percent construction unemployment rate. South Carolina, which had the fifth lowest rate in January, fell to seventh lowest, tied with Arizona with a 6.8 percent rate.

The Bottom Five States

The five states with the highest construction unemployment rates (from lowest to highest) were:

  1.  North Dakota
  2.  Wyoming
  3.  Rhode Island
  4.  West Virginia
  5.  Alaska

The five states with the highest estimated construction unemployment rates in February were the same as in January although some of the rankings changed.

As would be expected given that these are NSA rates, Alaska with an 18 percent rate in February had the highest rate for the sixth consecutive month. February’s rate was down 1.9 percent from Alaska’s January rate of 19.9 percent (based on revised data). A reduction in the February rate from January is somewhat common for Alaska, which has experienced a decline in ten of the previous 14 years.

West Virginia, with a 17.2 percent construction unemployment rate, had the second highest rate. In January, the state had the third highest rate based on revised data (previously reported as the second highest rate).

Rhode Island had the third highest February construction unemployment rate (15.7 percent). In January, the state had the fifth highest rate based on revised data (previously reported as tied with Illinois for fourth highest). The state had the largest year-over-year decline among the states in February (down 5.2 percent). The state has experienced improved construction activity for a number of months. As a result, the construction unemployment rate has fallen on a year-over-year basis each month starting in October 2014.

Wyoming had the fourth highest estimated construction unemployment rate for the second month in a row (15.4 percent). Its January ranking is based on revised data, previously reported with the sixth highest rate. No doubt reflecting the effects of the downturn in commodity prices in general and energy in particular, Wyoming had the largest year-over-year increase in its rate, up 5.5 percent.

North Dakota, another state suffering from the effects of the downturn in energy prices, posted the fifth highest construction unemployment rate in February, 14.9 percent rate. For the month, the state had both the second highest year-over-year increase (up 3.4 percent) and the second largest monthly decrease (down 1.7 percent). The monthly reduction in the state’s February construction unemployment rate has been the norm for North Dakota going back to 2001. Over most of this period, this was due to increased construction activity and, consequently, increased employment. This time, it is likely due to unemployed construction workers leaving the state for better prospects elsewhere.

Read more on ABC’s website.

Background

Associated Builders and Contractors (ABC) launched its state-by-state economic analysis in 2015 with the release of economist Bernard M. Markstein’s analysis of construction’s contribution to each state’s gross domestic product (GDP). Unique to ABC, Markstein’s monthly state-level construction unemployment rate estimate and analysis of state-level construction job markets is produced in addition to ABC’s existing national economic data and analysis.

Background on how the data was derived and Markstein’s methodology is available on ABC’s website. Markstein is also available for an interview to provide further analysis.

Feb_2016_State_Construction_Unemployment_Rates

ABC Reports: Construction Employment Growth Slow but Steady

ABCThe U.S. construction industry added 19,000 net new jobs in February according to an analysis of today’s U.S. Bureau of Labor Statistics employment release by Associated Builders and Contractors (ABC). Year-over-year, the industry has added 253,000 net new jobs, an increase of 4 percent. The nonresidential sector added only 2,800 net new jobs in February after adding 3,600 jobs in January (revised upward from 2,900). Nonresidential specialty trade contractors lost jobs for the second consecutive month, while residential specialty trade contractors added 13,800 net new jobs in February—more than the other four subsectors combined. The civil and heavy engineering category continued its tepid growth, adding just 700 net new jobs for the month.

“Though many contractors continue to report significant backlog, the broader macroeconomic data regarding construction do not reflect brisk industry recovery,” said Anirban Basu, ABC’s chief economist. “Rather, the data are consistent with steady, ongoing recovery in both spending and employment. Though today’s employment report will be viewed positively by most stakeholders in the economy, it was not a great report for nonresidential construction. The nonresidential specialty trade contractor subsector lost 1,500 jobs in February and has now lost jobs in two consecutive months. This performance stands in contrast to the initial two months of 2015, when nonresidential specialty trade contractors collectively added 31,000 positions.

“Despite this recent softness in the nonresidential employment data, recent nonresidential construction spending data were quite strong,” said Basu. “There is no indication in today’s release that the ongoing nonresidential construction recovery is in any way jeopardized. Undoubtedly, seasonal factors are at work, and it is likely that the industry will see progress in the value of construction put in place, employment, profitability and wage growth.”

The construction industry unemployment rate climbed to 8.7 percent in February, a 0.2 percent increase from January. The industry’s unemployment rate has now increased by 3.2 percent since September 2015. The unemployment rate across all industries remained unchanged at 4.9 percent. Nonresidential building construction employment expanded by 4,300 jobs in February and is up by 14,100 jobs or 1.9 percent on a year-over-year basis.

  • Residential building construction employment expanded by 2,100 jobs in February and is up by 32,200 jobs or 4.7 percent on a year ago basis.
  • Nonresidential specialty trade contractors lost 1,500 jobs for the month but employment in that category is up by 76,300 jobs or 3.3 percent from the same time one year ago.
  • Residential specialty trade contractors added 13,800 net new jobs in February and have added 122,900 jobs or 7.0 percent since February 2015.
  • The heavy and civil engineering construction segment gained 700 jobs in February and is up by 7,900 positions or 0.8 percent on a year over year basis.

 

ABC Forecast: Nonresidential Construction Rebounds During Slow Economic Recovery

ABC Forecast ABC Forecast2

ABC Reports: Tepid GDP Growth a Sign Construction Spending May Sputter; Decline Unlikely

ABC LogoReal gross domestic product (GDP) expanded by just 0.7 percent (seasonally adjusted annual rate) during the fourth quarter of 2015, according to an analysis of Bureau of Economic Analysis data released today by Associated Builders and Contractors (ABC). This paltry growth follows a 2 percent increase during the year’s third quarter and a 3.9 percent increase during the second quarter. For the year, GDP expanded by 2.4 percent, matching the rate of growth seen in 2014.

Nonresidential fixed investment shrank by 1.8 percent in the fourth quarter, the first time the segment has contracted since the third quarter of 2012. For the year, nonresidential fixed investment expanded by 2.9 percent after growing by 6.2 percent in 2014 and 3 percent in 2013.

“The economy did not end the year well,” said ABC Chief Economist Anirban Basu. “Today’s GDP data adds weight to the argument that the U.S. is in a corporate profits recession, an industrial recession, and was experiencing a softening of investments. With the exception of the residential building sector, business capital outlays have declined as corporations deal with a combination of sagging exports, competitive imports, declining energy related investments, rising wage pressures and healthcare costs.

“Recent turbulence in financial markets suggest that capital availability may continue to soften,” said Basu. “While residential construction is likely to continue to recover given the combination of low interest rates and accelerating household formation, nonresidential construction spending growth may begin to sputter a bit as those who deploy capital become more defensive. This is not to suggest that nonresidential construction spending is set to decline. Many contractors continue to report significant and growing backlog. However, the current situation suggests that the growth in backlog and ultimately in spending may not be quite as rapid as it was earlier in 2015.”

Six key input prices rose or remained unchanged in October on a monthly basis, while one remained unchanged:

  • Personal consumption expenditures expanded 2.2 percent in the fourth quarter after growing by 3 percent in the third quarter.
  • Spending on goods grew 2.4 percent in the fourth quarter after expanding 5 percent in the third quarter and 5.5 percent in the second quarter.
  • Real final sales of domestically produced output increased 1.2 percent for the fourth quarter after a 2.7 percent increase in the third quarter.
  • Federal government spending increased 2.7 percent in the fourth quarter, the segment’s largest increase since the third quarter of 2014.
  • Nondefense spending increased 1.4 percent in the fourth quarter after expanding 2.8 percent in the previous quarter.
  • National defense spending expanded by 3.6 percent in the fourth quarter after contracting by 1.4 percent during the third.

State and local government spending contracted by 0.6 percent in the fourth quarter after increasing by 2.8 percent in the third quarter.

GDP_Q4_2015

Life is full of frustrations…

Remus  and Mill my best friends, both victims of lymphoma earlier this year.

Remus and Mill my best friends, both victims of lymphoma earlier this year.

By Greg Sitek

One of my frustrations is that the two proposed highways bills – House Bill and Senate Bill – are currently in the congressional blender, committee review where the differences will be discussed argued and resolved with a compromise.

While there are several variances between the House-passed STRR (Surface Transportation Reauthorization & Reform) Act and the Senate approved DRIVE (Developing a Reliable and Innovative Vision for the Economy) Act, lawmakers in both chambers and from both sides of the aisle are confident agreement will be reached, hopefully, in short order. The most difficult issue is the final bill’s duration and investment amounts. Some conferees are advocating for a longer authorization at current funding levels and others are urging a program size increase for a shorter time period.

Senate and House leadership are committed to disposing with final highway bill action before turning attention to the omnibus appropriations bill. Government funding expires on Dec. 1. However, with the highway program’s current authorization expiring on Nov. 20, Congress is poised to approve another short-term extension until Dec. 4.

By the time you read this a bill will be passed – Maybe.

Transportation for America says:
15 months after MAP-21 was first extended in July 2014 and four short-term extensions and $18.9 billion in general fund transfers later, a select group of House and Senate leaders met y to begin ironing out the differences between each chamber’s bill in the hopes of passing a final version within the next few weeks. So where does each bill stand on key issues?

Both House and Senate bills largely represent three (or possibly six) more years of the status quo, doubling down on today’s outdated system for investing in transportation that shortchanges innovation and leaves local communities behind.

They’re willing to back that bet with as much as $85 billion of general taxpayer funds above and beyond the expected revenues from the gas tax.

We’ve put together a handy chart comparing the two bills on 11 key provisions or priorities like funding, greater local control, transit, TIGER, multimodal freight planning and funding, and others. Though there are a handful of policy improvements, some other areas take a clear step backwards from MAP-21.

Unfortunately, there’s little chance to further improve the final bill on most of our key priorities at this point, but we are keeping a close eye on discussions in the conference committee. Stay tuned with us on Facebook or Twitter for more updates as the negotiations continue.

Well, I was hoping to wish you a Merry Christmas and Happy New Highway Bill Year but that’s not to be. You’ll have to settle for a simple Merry Christmas and Happy New year to you and your families and friends.

Meanwhile to keep pace with things happening in the industry and to the highway bill, visit: www.site-Kconkstructionzone.com or scan (insert Site-K QR code) with your smart phone.