Tag Archive for 'Associated Builders and Contractors'

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According to ABC Construction Job Growth Led by Nonresidential Sector, But Remains Tepid

National construction employment remained largely unchanged for the second consecutive month, adding 5,000 net new jobs on a seasonally adjusted basis in April, according to analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC).

The nonresidential construction sector added 3,200 net new jobs in April after adding 8,500 net jobs in March (revised down from 13,300), while the residential sector added just 900 net jobs for the month. Construction employment expanded 2.6 percent on yearly basis, well above the year-over-year growth rate for all nonfarm industries (+1.6 percent).

“Today’s employment report confirms that the U.S. economic expansion remains firmly in place,” said ABC Chief Economist Anirban Basu. “That said, the simultaneous expansion in job totals and ongoing slow GDP growth indicate that the average net new job is associated with relatively low output. This is consistent with still-soft productivity growth and somewhat sluggish wage growth relative to expectations. Construction has been especially susceptible to weak productivity growth in recent years, in part because skilled workers capable of delivering elevated productivity remain in such short supply. The scarcity of skilled craftspeople helps explain the scant 0.2 percent growth in nonresidential building construction employment over the past year.

“Nonresidential construction added 3,200 net new jobs, however, nonresidential specialty trade contractors shed 5,100 net jobs in April,” said Basu. “It is conceivable that this occurred as certain segments of private development have begun to slow, including key commercial segments. Conversely, the loss in nonresidential specialty construction positions may simply be a one-month statistical anomaly.

“Recent construction spending data indicate that overall nonresidential construction activity is climbing only slowly,” said Basu. “This implies that hiring will remain moderate for the foreseeable future. Naturally, if the administration in Washington, D.C., is able to implement a significant portion of its pro-business agenda, the rate of job growth will eventually accelerate appreciably.”

The construction industry unemployment rate, which is available only on a non-seasonally adjusted basis, fell 2.1 percentage points in April and now stands at 6.3 percent. Due to seasonal factors, the industry unemployment rate almost always plummets from March to April. Since 2009, that decline as averaged 2.3 percentage points. The national unemployment rate inched down from 4.5 percent in March to 4.4 percent in April. This is the lowest nationwide rate since May of 2007.

April 2017 Construction Employment

ABC Says, Trump Admin’s First 100 Days Have Brought Improved Business Climate for Construction Industry

Associated Builders and Contractors (ABC) today praised President Trump for taking important steps to create a pro-growth business environment in a statement from ABC President and CEO Michael Bellaman.

“In his first 100 days in office President Trump has taken needed action to free business owners from unnecessarily burdensome regulations that have long hindered economic growth. ABC appreciates President Trump’s executive orders curbing Washington’s appetite for over regulation and collaboration with Congress to eliminate illegal and duplicative Obama administration regulations like the ‘blacklisting’ and ‘Volks’ rules.

“By valuing input from industries harmed by regulations that are often well-intentioned, but poorly crafted, President Trump can ensure a well-trained, safe and productive workforce without needlessly hindering economic growth. ABC’s 21,000 member companies employ a skilled and highly trained workforce ready to rebuild our nation, and we look forward to continuing to work with the Trump administration to fulfill his election night commitment to ‘fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.’ President Trump can also ensure ‘every single American will have the opportunity to realize his or her fullest potential,’ as he pledged on election night, by taking executive action to ensure that discriminatory project labor agreements cannot be mandated on projects funded by federal tax dollars.”

ABC Reports: Nonresidential Fixed Investment Surges Despite Sluggish Economic in First Quarter

The U.S. economy’s performance slowed in the first quarter of 2017, but nonresidential fixed investment expanded at an impressive 9.4 percent seasonally adjusted annual rate, according to analysis of U.S. Bureau of Economic Analysis data released today by Associated Builders and Contractors (ABC).

Real gross domestic product (GDP) expanded 0.7 percent on a seasonally adjusted annualized rate during the first three months of the year. Despite the subdued growth, GDP has now expanded in every quarter over the past three years. Fourth quarter 2016 growth was revised upward from a 1.9 percent annual rate of expansion to a 2.1 percent annual rate.

This represents the best quarter for nonresidential fixed investment, a category closely aligned with construction and other forms of business investment, since the end of 2013 and ends more than a year of tepid nonresidential fixed investment growth. Investment in structures, a subcomponent of nonresidential fixed investment, expanded 22.1 percent for the quarter after contracting by 1.9 percent in the fourth quarter of 2016. The other two subcomponents of nonresidential fixed investment—equipment and intellectual property products—expanded at a 9.1 percent rate and a 2.0 percent rate, respectively.

“It was expected that first quarter GDP would indicate that the U.S. economy remained unable to generate a high rate of growth,” said ABC Chief Economist Anirban Basu. “Many economic actors appear to have adopted a cautious attitude in an environment characterized by a considerable amount of policy uncertainty. The decline in defense expenditures is likely to be a surprise to many given recent discussions about supposed vast increases in defense outlays.

“The investment in nonresidential structures during the first three months of the year is particularly remarkable in an environment otherwise characterized as generating little economic growth,” said Basu. “Rather than adopt a wait-and-see attitude, developers appear to have acted with conviction, taking advantage of growing confidence among investors and other market participants to forge ahead with planned projects. While the new presidential administration has yet to implement even a small fraction of its pro-business agenda, the development community continues to express confidence in the administration’s ability to create the conditions necessary for a much more vibrant U.S. economy.

“The expectation is that the balance of the year will be associated with much more rapid growth,” said Basu. “Consumer spending should pick up after a weak first quarter, given accelerating wage increases and elevated levels of job security. Business spending is also likely to expand briskly, particularly if the Trump administration is able to make meaningful progress on the corporate and personal income tax front.”

ABC Says, Nonresidential Construction a Bright Spot in Disappointing Jobs Report

National construction employment remained largely unchanged in March, adding 6,000 net new jobs on a seasonally adjusted basis, according to analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC). The nonresidential construction sector added 13,300 net new jobs for the month, while the residential sector lost 7,600 net jobs.

“While today’s jobs report will be viewed primarily as a disappointment, nonresidential construction remains a bright spot, adding 13,000 jobs,” said ABC Chief Economist Anirban Basu. “Nonresidential construction’s growth is impressive given March’s colder weather, but it represents a slowing from the first two months of the year, when the sector averaged 29,100 net new jobs created per month.

“Total construction employment, hurt by job losses in the residential sector, also slowed in March from an average of 46,500 jobs per month in the first two months of 2017. Year-over-year total construction employment continued to easily outpace the overall economy, increasing by 2.6 percent from March 2016 compared to the broader nonfarm payroll expansion of 1.5 percent, signifying the industry’s economic health.

“A number of nonresidential segments performed particularly well from the perspective of job creation,” said Basu. “These included specialty trade contractors, who remained busy working on commercial construction projects, and heavy and civil engineering, which suggests a pickup in highway and street spending.

“With the nation’s unemployment rate now at just 4.5 percent, there is little reason to believe that securing construction talent is set to become easier,” said Basu. “In fact, the skilled worker shortages already experienced by many contractors are likely to become more severe as the year proceeds. The average contractor can therefore anticipate sharper compensation cost increases, particularly as firms securing new work scramble to put together project teams.”

The construction industry unemployment rate, which is available only on a nonseasonally adjusted basis, fell by 0.4 percent in March and now stands at 8.4 percent. The national unemployment rate fell by 0.2 percent and now stands at 4.5 percent.

 March 2017 Construction Employment 

ABC Reports: Construction Unemployment Rates Improve in 25 States

Construction unemployment rates were down in 25 states and unchanged in four in February on a year-over-year basis, according to analysis released today by Associated Builders and Contractors (ABC). The national not seasonally adjusted (NSA) construction unemployment rate of 8.8 percent was up 0.1 percent from February 2016, according to data from the U.S. Bureau of Labor Statistics (BLS).

Since these industry-specific rates are not seasonally adjusted, the best approach is to evaluate the national and state-level unemployment rates on a year-over-year basis.

“Despite the slight downturn in the year-over-year NSA national construction unemployment rate, half the states had a reduction in their rates from a year ago,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Overall, the construction sector remains healthy even as employers struggle against the headwind of mounting shortages of skilled construction workers.”

In spite of the year-over-year rise, this was the second lowest national February NSA construction unemployment rate since February 2006 when the rate was 8.6 percent. Meanwhile, BLS data showed that the industry employed 219,000 more workers than in February 2016.

The general pattern in the movement in the national NSA construction unemployment rate from January to February is an increase. Starting in 2000, when the BLS data for this series begins, through 2016, the February rate has risen 11 times, fallen five times and been unchanged once. Contrary to the normal pattern due to the unusually mild weather in much of the nation in February, this year there was a 0.6 percent rate drop in the NSA rate from January.

View states ranked by their construction unemployment rate, their year-over-year improvement in construction unemployment, their monthly improvement in construction unemployment, a regional breakdown of states’ construction unemployment rates and their February unemployment rates for all industries.

The Top Five States
The states with the lowest estimated NSA construction unemployment rates in order from lowest rate to highest were:

1. Utah
2. Colorado
3. Hawaii and Idaho (tie)
5. Nebraska

Three states—Colorado, Hawaii and Utah—were also among the top five in January. Utah had the lowest NSA construction unemployment rate (5.3 percent), an improvement from the fourth lowest rate in January, and was one of 36 states whose rate decreased from January, along with the national rate. Colorado had the second lowest industry rate in February and its 5.8 percent tied with 2007 for the state’s third lowest estimated February rate, behind 5.5 percent in 2006 and 5.4 percent in 2016.

Hawaii and Idaho, both with a 5.9 percent rate, had the third lowest rate in February. Hawaii dropped from lowest rate in January, despite its industry unemployment rate, which also includes mining and logging, dropping from 6 percent in January. For Idaho, it was the state’s second lowest estimated February rate since the beginning of the estimates in 2000, second only to last year’s 5.6 percent.

Nebraska jumped from the 20th lowest rate in January to the fourth lowest in February with a 6 percent construction unemployment rate.

The Bottom Five States
The states with the highest estimated NSA construction unemployment rates in order from lowest to highest rates were:

46. Pennsylvania
47. West Virginia
48. New Mexico
49. Rhode Island
50. Alaska

Three of these states—Alaska, Rhode Island and West Virginia—were also among the five states with the highest construction unemployment rates in January.

As in the previous five months, Alaska had the highest estimated NSA construction unemployment rate in February, 16.6 percent. It is normal for Alaska to have among the highest rates in the nation around this time of year since these are NSA construction unemployment rates. The state did see the biggest improvement from January (5.8 percent improvement) and fourth best year-over-year improvement (2.1 percent).

Rhode Island posted its lowest February construction unemployment rate since 2007, but still had the second highest construction unemployment rate in February (16.4 percent). New Mexico had the third highest estimated NSA construction unemployment rate in February (15 percent) and the largest year-over-year and monthly increases, up 2.6 percent and 1.2 percent, respectively.

West Virginia had the fourth highest rate in February (13.6 percent), but also posted the largest year-over-year decrease in its rate and the sixth largest decrease from January (both down 2.6 percent). It was also the state’s lowest February rate since the beginning of estimated construction unemployment rates in 2000.

Pennsylvania had the fifth highest construction unemployment rate in February (13.1 percent), but matched 2008 and 2016 for its lowest February rate since 2006 (9.7 percent).

Illinois, which had the fourth highest construction unemployment rate in January, had the eighth highest rate in February, 12.3 percent. The state had the sixth largest year-over-year decrease in its rate, down 1.8 percent, and the third largest decrease from the previous month, along with Montana, down 3.8 percent.

To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates.