Tag Archive for 'Associated Builders and Contractors'

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Get Ready to Vote

Baby & GTraditionally August is hot, humid, the vacation month, the yellow-cone-traffic-jamb-detour season; long weekends; yard work; painting; planning; fixing. It’s a busy time for everyone especially the construction industry. Is it as busy as it should be; needs to be?

By this time we know who is running for the presidency and what they are saying they will do. It’s not only the presidential who are trying to convince us they are what we needs it’s also people running for congress the house and the senate.

I recently received a press release from the Associated Builder and Contractors, ABC, which I would normally have run as a new item but because November is approaching faster than the end of summer I thought I’d share it with you now.

Construction Labor Force Shrinks, Job Numbers Flat

Labor Market Dynamics Cause for Concern

Despite a broader U.S. labor market rebound in June, the construction industry failed to add jobs for a third consecutive month, according to an analysis of today’s U.S. Bureau of Labor Statistics report by Associated Builders and Contractors (ABC). The construction industry’s employment level remained essentially unchanged in June.  

While nonresidential specialty trade contractors collectively added 3,700 net new positions, nonresidential builders shed 1,300 positions, and heavy and civil engineering contractors reduced staffing levels by another 3,900. Residential builders trimmed their employment total by 2,400 in June, while residential specialty trade contractors added 4,700 positions. 

“The construction industry unemployment rate declined to 4.6 percent in June from 5.2 percent the previous month, but not for the right reasons,” said Anirban Basu, ABC’s chief economist. “The overall national unemployment rate rose in June as labor force participation edged higher. However, the size of the construction industry labor force shrank. This may be an indication that as other segments of the U.S. economy continue to add jobs, a growing number of construction workers and construction jobseekers are shifting to other industries.  There are many implications associated with this pattern, including relatively faster wage growth despite the recent flattening in nonresidential construction spending. 

“As has been the case for many months, the most significant sources of weakness in construction activity and hiring relate to public spending,” said Basu. “Despite the passage of a federal highway spending bill late last year, heavy and civil engineering contractors, many of whom are engaged in work on roads and bridges, have been trimming employment. Not only did this segment shed jobs in June, but employment in this sector is slightly less than it was a year ago.

“The Bureau of Labor Statistics reported this morning that the nation added 287,000 net new jobs in June, led by job growth in leisure, healthcare, professional/business services, retail and finance. The information sector also added jobs as striking Verizon workers returned to work. Given the recent rise in oil prices, construction industry stakeholders may be speculating that some workers may have left the industry for the energy production sector,” said Basu

Employment_7_8_16 Employment_Chart 2 7_8_16There are only days left until the election. The presidential election is important but so are all the elections. Take time to understand what the representatives you vote for stand for; believe in; support.

Our highways and infrastructure are crumbling; we need people in congress who understand the importance of updating, repairing, replacing and maintaining these resources.

In November VOTE, but vote intelligently.

ABC Reports: Construction Material Prices Rise Month-to-Month, Remain Historically Low

Construction input prices expanded on a monthly basis for the second consecutive month in April, increasing by 0.5 percent according to an analysis of the Bureau of Labor Statistics (BLS) Producer Price Index released today by Associated Builders and Contractors (ABC). The two-month growth streak follows nine consecutive months during which construction input prices fell and construction input prices remain 2.9 percent below their April 2015 levels.

Prices have now decreased on a year-over-year basis for seventeen consecutive months. Nonresidential construction inputs behaved similarly, expanding 0.5 percent month-over-month but falling 3.1 percent year-over-year.

“Despite the end of month-to-month materials price decreases, prices remain low by historic standards and will likely continue to do so for the foreseeable future,” said ABC Chief Economist Anirban Basu. “Commodity prices, including oil prices, have been edging higher lately in response to a number of potentially temporary phenomena, including a weakening U.S. dollar. Coming into the year, the presumption among many market participants was that U.S. interest rates would rise meaningfully, thereby increasing the value of the dollar. Contrary to expectations, interest rates have not risen significantly, and the dollar has been weakening in response.

“That has helped to set the stage for the recent bounce-back in oil and certain other commodity prices,” said Basu. “Other factors have not been as supportive, including a still-weak global economy. Global economic weakness is likely to persist, and the dollar may begin to strengthen again. This means that construction firm managers should not assume that oil and other prices will rise steadily. In fact, reversals in commodity prices remain quite possible. While oil prices have risen sharply since lows achieved earlier this year, copper, natural gas and other prices have expanded only modestly. The next materials price report could easily show further inflation. The story of inexpensive materials will continue to be told.”

Eight key input prices rose in April on a monthly basis:

Crude petroleum prices expanded 17.6 percent from March 2016 but are down 22.4 percent from April 2015.

Unprocessed energy material prices rose 9 percent on a monthly basis but fell 18.2 percent on a year-ago basis.

Prices for steel mill products are up 2 percent on a monthly basis but down 11.3 percent on a yearly basis.

Iron and steel prices expanded 4.9 percent month-over-month but declined 8.6 percent year-over-year.

Softwood lumber prices grew 2.7 percent for the month and 1.8 percent from April 2015.

Concrete product prices expanded by 0.7 percent month-over-month and are up 3.1 percent year-over-year.

Natural gas prices increased 8.4 percent for the month but are down 25.7 percent from the same period one year ago.

Fabricated structural metal prices products rose 0.2 percent month-over-month but decreased 2 percent year-over-year.

Three key input prices declined on a monthly basis:

Prices for prepared asphalt and tar and roofing and siding products fell by 1.9 percent from March 2016 and are down 1.5 percent from April 2015.

Prices for plumbing fixtures and fittings fell 0.1 percent for the month but are up 0.1 percent from the same time last year.

Nonferrous wire and cable prices fell 0.3 percent on a monthly basis and 6.1 percent on a yearly basis.


Additional ABC Economic Analysis:
Construction Spending
Construction Employment
Producer Price Index
Economic Growth (GDP)
ABC Economic Reports:
Construction Backlog Indicator (CBI)
Construction Confidence Index
State-Level Reports

ABC Reports: Nonresidential Spending Slip in February No Cause for Alarm

NRNonresidential construction spending dipped in February, falling 1.4 percent on a monthly basis according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC). Spending in the nonresidential sector totaled $690.3 billion on a seasonally adjusted, annualized basis in February. While this represents a step back from January’s figure of $700.3 billion (revised down from $701.9 billion), it is still 1.5 percent higher than the level of spending registered in December 2015 and 10.1 percent higher than February 2015.

“February’s weather was particularly harsh in certain parts of the country, including in the economic activity-rich Mid-Atlantic region, and that appears to have had an undue effect on construction spending data,” said ABC Chief Economist Anirban Basu.  “February data are always difficult to interpret, and the latest nonresidential construction spending figures are no different. Seasonal factors have also made state-level data very difficult to interpret.

“Beyond meteorological considerations, there are other reasons not to be alarmed by February’s decline in nonresidential construction spending,” said Basu. ”Today’s positive construction employment report indicates continued economic growth. Moreover, much of the decline in volume was attributable to manufacturing, but the ISM manufacturing index recently crossed the threshold 50 level, indicating that domestic manufacturing is now expanding for the first time in seven months.”

Eight of the sixteen nonresidential subsectors experienced spending decreases in February, though almost half of the total decline in spending is attributable to the 5.9 percent decline in manufacturing-related spending.

The following 16 nonresidential construction sectors experienced spending increases in February on a monthly basis:

  • Spending in the amusement and recreation category climbed 0.4 percent from January and is up 13.7 percent from February 2015.
  • Lodging-related spending is up 0.4 percent for the month and is up 30.1 percent on a year-ago basis.
  • Water supply-related spending expanded 1.9 percent on a monthly basis and 3.2 percent on a yearly basis.
  • Spending in the office category grew 3.8 percent from January and is up 25.3 percent on a year-ago basis.
  • Transportation-related spending expanded 0.5 percent month-over-month and 5.8 percent year-over-year.
  • Health care-related spending expanded 2 percent from January and is up 3.3 percent from February 2015.
  • Public safety-related spending is up 1.8 percent for the month, but is down 5.3 percent for the year.
  • Commercial-related construction spending inched 0.1 percent higher for the month and grew 11 percent for the year.

Spending in eight of the nonresidential construction subsectors fell in February on a monthly basis:

  • Educational-related construction spending fell 2.4 percent from January, but has expanded 8.5 percent on a yearly basis.
  • Communication-related spending fell 15 percent month-over-month, but expanded 11.8 percent year-over-year.
  • Spending in the highway and street category fell 2 percent from January, but is 24.5 higher than one year ago.
  • Sewage and waste disposal-related spending fell 2.4 percent for the month, but is up 2.3 percent for the year.
  • Conservation and development-related spending is 4.6 percent lower on a monthly basis and 16.8 percent lower on a year-over-year basis.
  • Spending in the religious category fell 4 percent for the month and is up just 0.7 percent for the year.
  • Manufacturing-related spending fell 5.9 percent on a monthly basis and is up only 0.8 percent on a yearly basis.

Spending in the power category fell 0.6 percent from January, but is 4.8 percent higher than one year ago.


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.


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.


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.