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TRIP: DEFICIENT ROADWAYS COST ALABAMA DRIVERS $1,562 ANNUALLY, TOTAL OF $3.1 BILLION STATEWIDE. COSTS WILL RISE AND TRANSPORTATION WOES WILL WORSEN WITHOUT SIGNIFICANT FUNDING BOOST

DEFICIENT ROADWAYS COST ALABAMA DRIVERS AS MUCH AS $1,562 ANNUALLY, A TOTAL OF $3.1 BILLION STATEWIDE. COSTS WILL RISE AND TRANSPORTATION WOES WILL WORSEN WITHOUT SIGNIFICANT FUNDING BOOST 

Roads and bridges that are deficient, congested or lack desirable safety features cost Alabama motorists a total of $3.1 billion statewide annually due to higher vehicle operating costs, traffic crashes and congestion-related delays. Increased investment in transportation improvements at the local, state and federal levels could relieve traffic congestion, improve road and bridge conditions, boost safety, and support long-term economic growth in Alabama, according to a new report released today by TRIP, a Washington, DC based national transportation organization.

The TRIP report, Alabama Transportation by the Numbers: Meeting the State’s Need for Safe and Efficient Mobility,” finds that throughout Alabama, 15 percent of major urban roads and highways are in poor condition. Nearly a quarter of Alabama’s bridges are structurally deficient or functionally obsolete. The state’s major urban roads are becoming increasingly congested, with drivers wasting significant amounts of time and fuel each year. And, Alabama’s rural non-interstate traffic fatality rate is nearly double the fatality rate on all other roads in the state.

Driving on deficient roads costs state drivers as much as $1,562 per year in the form of extra vehicle operating costs (VOC) as a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays, and the cost of traffic crashes in which roadway features likely were a contributing factor. The TRIP report calculated the cost to motorists of insufficient roads in Alabama’s largest urban areas: Birmingham, Huntsville, Mobile and Montgomery. A breakdown of the costs per motorist in each area along with a statewide total is below.

TRIP AL 1Deficient-roads-cost-Alabama-4_areas“Those of us in the business community are painfully aware of the deficiencies in Alabama’s transportation infrastructure and the direct impact it has on our competitiveness,” said William J. Canary, president and CEO of the Business Council of Alabama. “It is time to move together as a state to solve this problem and ensure a broad range of economic opportunities. Alabama’s future depends on it.”

A total of 23 percent of Alabama’s bridges show significant deterioration or do not meet modern design standards.  Nine percent of Alabama’s bridges are structurally deficient, with significant deterioration to the bridge deck, supports or other major components. An additional 14 percent of the state’s bridges are functionally obsolete, which means they no longer meet modern design standards, often because of narrow lanes, inadequate clearances or poor alignment.

Traffic crashes in Alabama claimed the lives of 4,435 people between 2008 and 2012. Alabama’s traffic fatality rate of 1.33 fatalities per 100 million vehicle miles of travel is significantly higher than the national average of 1.13.  The traffic fatality rate on Alabama’s non-Interstate rural roads in 2012 was 1.92 traffic fatalities per 100 million vehicle miles of travel, nearly double the 0.99 traffic fatalities per 100 million vehicle miles of travel on all other roads and highways in the state.

“The importance of a long-term sustainable highway construction program is critical to the future of Alabama’s continued economic health.  The safety of the traveling public is just one part of the need for such a program,” said Billy Norrell, CEO of the Alabama Associated General Contractors.  “As our state highways and bridges continue to be strained by increased traffic and wear and tear, there is no choice but to inject additional resources into the system.  Current funding levels are restricting the department into more of a maintenance only organization, capable of less and less new capacity work.  We are confident our elected officials will make the difficult but proper choices when it comes to the future of Alabama’s infrastructure.”

The Federal surface transportation program is a critical source of funding in Alabama.  From 2008 to 2012, the federal government provided $1.32 for road improvements in Alabama for every dollar the state paid in federal motor fees. Congress recently approved an eight-month extension of the federal surface transportation program, which will now run through May 31, 2015. The recent legislation will also transfer nearly $11 billion into the Highway Trust Fund (HTF) to preserve existing levels of highway and public transportation investment through the end of May 2015. The following projects would require significant federal funding to proceed prior to 2019: the construction of several new routes in Montgomery, Birmingham, Anniston and Auburn to relieve congestion and provide for future growth, widening portions of US-80 in Sumter and resurfacing a portion of I-10 in Mobile. A full list of projects can be found in Appendix B.

“These conditions are only going to get worse if greater funding is not made available at the state and federal levels,” said Will Wilkins, TRIP’s executive director. “Congress can help by approving a long-term federal surface transportation program that provides adequate funding levels, based on a reliable funding source. If not, Alabama is going to see its future federal funding threatened, resulting in in fewer road and bridge repair projects, loss of jobs and a burden on the state’s economy.”

TRIP Report

ALABAMA TRANSPORTATION BY THE NUMBERS:

Meeting the State’s Need for Safe and Efficient Mobility

AUGUST 2014

Ten Key Transportation Numbers in Alabama

 

$3.1 Billion

Driving on deficient roads costs Alabama motorists a total of $3.1 billion annually in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

$1,562$1,226$1,195

$1,218

TRIP has calculated the cost to the average motorist in Alabama’s largest urban areas in the form of additional VOC, congestion-related delays and traffic crashes. The cost for the average driver in each urban area is: Birmingham: $1,562; Huntsville: $1,226; Mobile: $1,195; Montgomery: $1,218.

8874,435

On average, 887 people were killed annually in Alabama traffic crashes from 2008 to 2012, a total of 4,435 fatalities over the five year period.

2X

The fatality rate on Alabama’s non-interstate rural roads is nearly double that on all other roads in the state (1.92 fatalities per 100 million vehicle miles of travel vs. 0.99).

$183 billion$189 billion

Annually, $183 billion in goods are shipped from sites in Alabama and another $189 billion in goods are shipped to sites in Alabama, mostly by truck.

23 %

A total of 23 percent of Alabama bridges are in need of repair, improvement or replacement. Nine percent of the state’s bridges are structurally deficient and 14 percent are functionally obsolete.

35 hours28 hours28 hours

29 hours

The average driver in the Birmingham urban area loses 35 hours each year as a result of traffic congestion;  each Huntsville driver loses 28 hours each year; each Mobile driver loses 28 hours; and each Montgomery driver loses 29 hours.

$1.32 

From 2008 to 2012, the federal government provided $1.32 for road improvements in Alabama for every dollar paid in federal motor fuel fees

$1 billion=27,800 jobs An analysis by the Federal Highway Administration found that every $1 billion invested in highway construction would support approximately 27,800 jobs, including approximately 9,500 in the construction sector, approximately 4,300 jobs in industries supporting the construction sector, and approximately 14,000 other jobs induced in non-construction related sectors of the economy.
$1.00 = $5.20

The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs, and reduced emissions as a result of improved traffic flow.

 

Executive Summary

Alabama’s extensive system of roads, highways and bridges provides the state’s residents, visitors and businesses with a high level of mobility. This transportation system forms the backbone that supports the state’s economy. Alabama’s surface transportation system enables the state’s residents and visitors to travel to work and school, visit family and friends, and frequent tourist and recreation attractions while providing its businesses with reliable access to customers, materials, suppliers and employees.

As Alabama looks to retain its businesses, maintain its level of economic competitiveness and achieve further economic growth, the state will need to maintain and modernize its roads, highways and bridges by improving the physical condition of its transportation network and enhancing the system’s ability to provide efficient and reliable mobility for motorists and businesses.  Making needed improvements to Alabama’s roads, highways and bridges could also provide a significant boost to the state’s economy by creating jobs in the short term and stimulating long term economic growth as a result of enhanced mobility and access

With a current unemployment rate of 6.8 percent and with the state’s population continuing to grow, Alabama must improve its system of roads, highways and bridges to foster economic growth and keep businesses in the state. In addition to economic growth, transportation improvements are needed to ensure safe, reliable mobility and quality of life for all Alabamans.  Meeting Alabama’s need to modernize and maintain its system of roads, highways and bridges will require a significant boost in local, state and federal funding.

Signed into law in July 2012, MAP-21 (Moving Ahead for Progress in the 21st Century Act), has improved several procedures that in the past had delayed projects, MAP-21 does not address long-term funding challenges facing the federal surface transportation program. Congress recently approved the Highway and Transportation Funding Act of 2014, an eight-month extension of the federal surface transportation program, on which states rely for road, highway, bridge and transit funding. The program, initially set to expire on September 30, 2014, will now run through May 31, 2015. In addition to extending the current authorization of the highway and public transportation programs, the legislation will transfer nearly $11 billion into the Highway Trust Fund (HTF) to preserve existing levels of highway and public transportation investment through the end of May 2015.

Congress will need to pass new legislation prior to the May 31 extension expiration to ensure prompt federal reimbursements to states for road, highway, bridge and transit repairs and improvements.

The level of funding and the provisions of the federal surface transportation program have a significant impact on highway and bridge conditions, roadway safety, transit service, quality of life and economic development opportunities in Alabama.

An inadequate transportation system costs Alabama residents a total of $3.1 billion every year in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

  • TRIP estimates that Alabama roadways that lack some desirable safety features, have inadequate capacity to meet travel demands or have poor pavement conditions cost the state’s residents approximately $3.1 billion annually in the form of additional vehicle operating costs (including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear), the cost of lost time and wasted fuel due to traffic congestion, and the financial cost of traffic crashes.
  • TRIP has calculated the average cost to drivers in the state’s largest urban areas as a result of driving on roads that are deteriorated, congested and lack some desirable safety features. The chart below details the costs to drivers in the Birmingham, Huntsville, Mobile and Montgomery areas.

Trip AL 2Population and economic growth in Alabama have resulted in increased demands on the state’s major roads and highways, leading to increased wear and tear on the transportation system. 

  • Alabama’s population reached approximately 4.8 million in 2012, a 19 percent increase since 1990. Alabama had 3,827,522 licensed drivers in 2012.
  • Vehicle miles traveled (VMT) in Alabama increased by 53 percent from 1990 to 2012 – jumping from 42.3 billion VMT in 1990 to 65 billion VMT in 2012.
  • By 2030, vehicle travel in Alabama is projected to increase by another 30 percent.
  • From 1990 to 2012, Alabama’s gross domestic product, a measure of the state’s economic output, increased by 47 percent, when adjusted for inflation.

A lack of adequate state and local funding has resulted in fifteen percent of major urban roads and highways in Alabama having pavement surfaces in poor condition, providing a rough ride and costing motorist in the form of additional vehicle operating costs. 

  • Fifteen percent of Alabama’s major urban roads and highways have pavements in poor condition, while an additional 35 percent of the state’s major urban roads are rated in mediocre or fair condition and the remaining 50 percent are rated in in good condition.
  • Roads rated in poor condition may show signs of deterioration, including rutting, cracks and potholes.  In some cases, poor roads can be resurfaced, but often are too deteriorated and must be reconstructed.
  • Driving on rough roads costs all Alabama motorists a total of $855 million annually in extra vehicle operating costs. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.
  • The chart below details the pavement conditions on major roads in the state’s largest urban areas.

TRIP AL 3Twenty-three percent of locally and state-maintained bridges in Alabama show significant deterioration or do not meet current design standards often because of narrow lanes, inadequate clearances or poor alignment. This includes all bridges that are 20 feet or more in length. 

  • Nine percent of Alabama’s bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.
  • Fourteen percent of Alabama’s bridges are functionally obsolete.  Bridges that are functionally obsolete no longer meet current highway design standards, often because of narrow lanes, inadequate clearances or poor alignment.

Alabama’s traffic fatality rate is significantly higher than the national average.  Improving safety features on Alabama’s roads and highways would likely result in a decrease in the state’s traffic fatalities and serious crashes. It is estimated that roadway features are likely a contributing factor in approximately one-third of all fatal and serious traffic crashes. 

  • Between 2008 and 2012 a total of 4,435 people were killed in traffic crashes in Alabama, an average of 887 fatalities per year.
  • Alabama’s overall traffic fatality rate of 1.33 fatalities per 100 million vehicle miles of travel in 2012 is significantly higher than the national traffic fatality rate of 1.13.
  • The fatality rate on Alabama’s rural non-Interstate roads was 1.92 fatalities per 100 vehicle miles of travel in 2012, nearly double the 0.99 fatality rate on all other roads and highways in the state.
  • Roadway features that impact safety include the number of lanes, lane widths, lighting, lane markings, rumble strips, shoulders, guard rails, other shielding devices, median barriers and intersection design.  The cost of serious crashes includes lost productivity, lost earnings, medical costs and emergency services.
  • Several factors are associated with vehicle crashes that result in fatalities, including driver behavior, vehicle characteristics and roadway features.  TRIP estimates that roadway features are likely a contributing factor in approximately one-third of fatal traffic crashes.
  • Where appropriate, highway improvements can reduce traffic fatalities and crashes while improving traffic flow to help relieve congestion.  Such improvements include removing or shielding obstacles; adding or improving medians; improved lighting; adding rumble strips, wider lanes, wider and paved shoulders; upgrading roads from two lanes to four lanes; and better road markings and traffic signals.
  • Investments in rural traffic safety have been found to result in significant reductions in serious traffic crashes.  A 2012 report by the Texas Transportation Institute (TTI) found that improvements completed recently by the Texas Department of Transportation that widened lanes, improved shoulders and made other safety improvements on 1,159 miles of rural state roadways resulted in 133 fewer fatalities on these roads in the first three years after the improvements were completed (as compared to the three years prior).   TTI estimates that the improvements on these roads are likely to save 880 lives over the next 20 years.

Increasing levels of traffic congestion cause significant delays in Alabama, particularly in its larger urban areas, choking commuting and commerce. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.

  • According to the Texas Transportation Institute (TTI), the average driver in the Birmingham urban area loses $773 each year in the cost of lost time and wasted fuel as a result of traffic congestion. The average commuter in the Birmingham urban area wastes 35 hours each year stuck in traffic.
  • Based on TTI methodology, TRIP estimates that the average driver in the Huntsville urban area loses $594 each year in the cost of lost time and wasted fuel as a result of traffic congestion. The average Huntsville commuter wastes 28 hours each year stuck in traffic.
  • Based on TTI methodology, TRIP estimates that the average Mobile-area driver loses $601 each year in the cost of lost time and wasted fuel as a result of traffic congestion. On average, Mobile commuters waste 28 hours each year stuck in traffic.
  • Based on TTI methodology, TRIP estimates that the average driver in the Montgomery urban area loses $604 each year in the cost of lost time and wasted fuel as a result of traffic congestion. The average Montgomery commuter wastes 29 hours each year stuck in traffic.
  • Increasing levels of congestion add significant costs to consumers, transportation companies, manufacturers, distributors and wholesalers and can reduce the attractiveness of a location to a company to consider expansion or even to locate a new facility. Congestion costs can also increase overall operating costs for trucking and shipping companies, leading to revenue losses, lower pay for drivers and employees, and higher consumer costs.

The efficiency of Alabama’s transportation system, particularly its highways, is critical to the health of the state’s economy.  Businesses are increasingly reliant on an efficient and dependable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.

  • Annually, $183 billion in goods are shipped from sites in Alabama and another $189 billion in goods are shipped to sites in Alabama, mostly by truck.
  • Seventy-six percent of the goods shipped annually from sites in Alabama are carried by trucks and another ten percent are carried by courier services or multiple mode deliveries, which include trucking.
  • Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
  • Businesses have responded to improved communications and greater competition by moving from a push-style distribution system, which relies on low-cost movement of bulk commodities and large-scale warehousing, to a pull-style distribution system, which relies on smaller, more strategic and time-sensitive movement of goods.
  • Highway accessibility was ranked the number one site selection factor in a 2011 survey of corporate executives by Area Development Magazine.
  • A 2007 analysis by the Federal Highway Administration found that every $1 billion invested in highway construction would support approximately 27,800 jobs, including approximately 9,500 in the construction sector, approximately 4,300 jobs in industries supporting the construction sector, and approximately 14,000 other jobs induced in non-construction related sectors of the economy.
  • The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.

The federal government is a critical source of funding for Alabama’s roads, highways and bridges and provides a significant return to Alabama in road and bridge funding based on the revenue generated in the state by the federal motor fuel tax. 

  • Signed into law in July 2012, MAP-21 (Moving Ahead for Progress in the 21st Century Act), has improved several procedures that in the past had delayed projects, MAP-21 does not address long-term funding challenges facing the federal surface transportation program.
  • Congress recently approved the Highway and Transportation Funding Act of 2014, an eight-month extension of the federal surface transportation program, on which states rely for road, highway, bridge and transit funding. The program, initially set to expire on September 30, 2014, will now run through May 31, 2015. In addition to extending the current authorization of the highway and public transportation programs, the legislation will transfer nearly $11 billion into the Highway Trust Fund (HTF) to preserve existing levels of highway and public transportation investment through the end of May 2015.
  • From 2008 to 2012, the federal government provided $1.32 for road improvements in Alabama for every dollar the state paid in federal motor fuel fees.
  • Federal funding has allowed the state to complete many needed transportation projects since 2005, including widening of several portions of I-65, rehabilitation of several sections of I-59, and widening and rehabilitation of portions of I-20. A full list of projects can be found in Appendix A.
  • Numerous transportation projects throughout the state would require significant federal funding to proceed prior to 2019. These projects include the construction of several new routes in Montgomery, Birmingham, Anniston and Auburn to relieve congestion and provide for future growth, as well as widening portions of US-80 in Sumter and resurfacing a portion of I-10 in Mobile. The list of projects can be found in Appendix B.
  • The Alabama Department of Transportation relies heavily on its allocation of federal funds to keep the state’s roads open and in an acceptable state of repair.  Without the annual allocation of federal dollars, the state would lose $170 million for Interstate maintenance (about 85 miles), $80 million for bridge replacement (about 40 bridges), $260 million for the resurfacing of state routes (about 850 miles), and $150 million in capacity improvements (new roads/added lanes).

Sources of information for this report include the Alabama Department of Transportation (ALDOT), the Federal Highway Administration (FHWA), the Bureau of Transportation Statistics (BTS), the U.S. Census Bureau, the American Association of State Highway and Transportation Officials (AASHTO), the Texas Transportation Institute (TTI) and the National Highway Traffic Safety Administration (NHTSA).  

For the full report click here

Wells Fargo Reports: Job Openings and Hiring Picked Up in June

Wells_Fargo_Securities_logoJob openings posted another solid gain in June as businesses look to step up hiring. The job opening rate now

matches the highs of the past expansion, while more workers are voluntarily quitting their jobs.

Labor Market Tightening

· The June JOLTS report showed firms are increasingly ready to

hire. Job openings rose to the highest level in 13 years and

indicate continued strong job gains in the months ahead.

· The surge in job openings in recent months is another sign of a

tightening labor market. The number of unemployed workers

per job opening has fallen to 2.0 from 3.0 a year earlier and

suggests less labor market slack than the unemployment rate.

Churn Improving

· Opening rates for the leisure & hospitality and professional &

business services industries have turned up sharply in recent

months, suggesting continued job gains at both ends of the wage

spectrum.

· Quits continue to account for a rising share of separations as

workers view more opportunities in the labor market, while

gross hiring climbs steadily

1 2 3 4

ABC Reports: Construction Materials Prices Flat in July

CEU2“The weakening of economies in Europe, Japan and elsewhere has reduced demand for construction materials on a global basis.” —ABC Chief Economist Anirban Basu.

ppi_8 15 14Overall, construction materials prices inched higher in July and are up 2 percent year over year, according to the Aug. 15 producer price index (PPI) release by the U.S. Department of Labor. Nonresidential construction materials prices were flat for the month and are just 1.4 percent higher than at the same time one year ago.

“The weakening of economies in Europe, Japan and elsewhere has reduced demand for construction materials on a global basis, helping to offset the impact of geopolitical strife in commodity-rich areas,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Oil and other commodity prices have actually been falling in recent days as additional bad economic news emerges from Germany, France, Italy and other major economies.”

Crude energy materials prices fell 6.3 percent in July and are 1.7 percent lower than one year ago. Natural gas prices fell by 5.7 percent in July and have now fallen in four of the past five months on a monthly basis. On a year-over-year basis, natural gas prices have expanded by more than 10 percent for each month of 2014. Overall, the nation’s final demand prices, as measured by the PPI, expanded by 0.1 percent in July and are up 1.7 percent year over year.

“While the harsh winter helped to lift energy prices during the initial quarter of 2014, a cool and pleasant summer has helped to usher them in the opposite direction,” said Basu. “From a monetary policy perspective, the 1.7 percent year-over-year gain in overall final demand prices bodes well for those who would prefer to see the Federal Reserve continue its soft-on-inflation policymaking. During previous months, final demand price gains were in the range of 2 percent on a year-over-year basis. The July data will help to assuage inflation-related fears.”

The following materials prices increased in July.

· Softwood lumber prices expanded 3.4 percent and are 9.5 percent higher than one year ago.

· Prices for plumbing fixtures expanded 0.9 percent in July and are up 2.8 percent on a year-over-year basis.

· Concrete products prices expanded 0.4 percent in July and are up 3.6 percent on a yearly basis.

· Steel mill products prices rose 0.1 percent for the month and are 3.9 percent higher than one year ago.

· Fabricated structural metal product prices grew 0.2 for the month and have expanded 1.3 percent on a year-over-year basis.

· Nonferrous wire and cable prices grew 0.6 percent on a monthly basis, but are down 0.8 percent from July 2013.

Five of the 11 key construction inputs did not experience price increases for the month.

· Prices for prepared asphalt, tar roofing, and siding declined 4.2 percent for the month and are down 9.1 percent on a year-ago basis.

· Iron and steel prices remained flat in July and are up 3.2 percent from the same time last year.

· Natural gas prices shed 5.7 percent in June but are 16.4 percent higher than one year ago.

· Crude petroleum prices fell 8 percent in July on both a monthly and a yearly basis.

· Crude energy materials prices fell 6.3 percent in July and are 1.7 percent lower year over year.

To view the previous PPI report, click HERE

ABC Reports:Construction Employment Regains Momentum While Construction Spending Falters

CEU2“Gains in momentum for the U.S. economy mean that nonresidential construction is poised for better times ahead.”—ABC Chief Economist Anirban Basu.

According to the Bureau of Labor Statistics Aug. 1 preliminary employment report, the U.S. construction industry added 22,000 jobs in July with nonresidential construction contributing 6,600 of those jobs—including 2,500 jobs in the heavy and civil engineering segment— which represents a significant improvement from the 100 nonresidential construction jobs added the previous month.

In the U.S. Census Bureau report analyzing construction spending for June, nonresidential construction spending fell for the month after posting significant gains the two prior months, but remains 4.6 percent higher from a year ago. Spending for June totaled $588.8 billion on a seasonally adjusted, annualized basis, a 2.8 percent drop from the upwardly revised $605.6 billion in nonresidential construction spending from the previous report.

Nonresidential Construction Employment Regains Momentum in July

“Economic news continues to improve as the U.S. economy has now added more than 200,000 jobs a month for six consecutive months, the first winning streak of this type since 1997,” said Associated Builders and Contractors Chief Economist Anirban Basu. “While nonresidential construction’s cycle tends to lag that of the overall economy by roughly a year, gains in momentum for the U.S. economy mean that nonresidential construction is poised for better times ahead. While the 6,600 nonresidential jobs added last month may hardly seem Earth-shattering, it’s important to note that the U.S. economy only expanded by around 1 percent during the first six months of the year. The renewal of economic momentum remains in its infancy, but this momentum will gradually translate into an acceleration of nonresidential employment creation.”

The national construction unemployment rate fell to 7.5 percent on a non-seasonally adjusted basis in July. “July’s construction unemployment rate represents the lowest figure since November 2007, the month before the recession began,” said Basu. “The rate of unemployment is even lower in certain rapidly expanding states, including North Dakota, Texas and Louisiana, which are wrestling with too few construction workers, not too many.”

According to the Bureau of Labor Statistics’ household survey, the national unemployment rate inched up a tenth of a point in July to 6.2 percent. That should not be viewed as bad news, however, as the labor market expanded by 329,000 people and labor force participation crept up to 62.9 percent.

“Historically, July is not a good month for labor force growth,” said Basu. “But the most recent July is associated with the most solid labor force expansion observed since 1996.”

“Before nonresidential construction stakeholders become too excited, it should be noted that the recovery of the U.S. labor market is not unfettered good news,” Basu concluded. “Growing evidence of emerging wage pressures is likely to translate into higher interest rates, if not now, then at some point. That would likely temper at least some of the industry momentum presently building.”

Individual sectors saw the following changes:

Nonresidential building construction employment fell by 400 jobs for the month, but is up by 21,100 jobs, or 3.1 percent, since July 2013.

Residential building construction employment rose by 6,100 jobs in July and is up by 54,400 jobs, or 8.9 percent, on an annual basis.

Nonresidential specialty trade contractors added 7,000 jobs for the month and employment in that category is up by 40,800 jobs, or 1.9 percent, from the same time one year ago.

Residential specialty trade contractors gained 6,900 jobs in July and have added 61,200 jobs, or 3.9 percent, since July 2013.

The heavy and civil engineering construction segment gained 2,500 jobs in July and job totals are up by 33,800, or 3.8 percent, on a year-over-year basis.

Employment_8 1To view the previous employment report, click here.

Nonresidential Construction Spending Growth Falters in June

“The monthly decline in spending should not be cause for significant alarm,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The impact of a brutal winter continues to manifest itself in the data. A considerable volume of construction was postponed during the year’s initial months with some of that construction taking place in April and May, artificially boosting activity during those months. Accordingly, June doesn’t look particularly good from a month-over-month perspective, but from a year-over-year perspective, the growth in spending looks perfectly adequate. Stakeholders should not have anticipated an upbeat June number in any case after national nonresidential construction employment expanded by just 100 people that month.”

“With job growth accelerating, consumer outlays expanding, industrial production rising and energy production surging, the outlook for nonresidential construction remains good,” said Basu. “The next few months should be associated with improving performance, if not on a monthly basis, then on a year-over-year one.”

Five of 16 nonresidential construction subsectors posted increases in spending in June on a monthly basis.

Office-related construction spending grew by 0.4 percent in June and is up 20.7 percent from the same time one year ago.

Religious spending grew 0.7 percent for the month and is up 4.3 percent from the same time last year.

Sewage and waste disposal-related construction spending gained 0.3 percent for the month and has grown 7.8 percent on a 12-month basis.

Conservation and development-related construction spending expanded by 13.5 percent for the month and is up 47.6 percent on a yearly basis.

Health care-related construction spending grew 2.5 percent for the month, but is down 5.6 percent on an annual basis.

Spending in 11 nonresidential construction subsectors declined in June.

Manufacturing-related spending fell 0.4 percent on a monthly basis, but is up 8.4 percent from the same time last year.

Education-related construction spending fell 4 percent for the month and is down 6 percent on a year-over-year basis.

Commercial construction spending fell 1.4 percent in June but is up 9.7 percent on a year-over-year basis.

Lodging construction spending is down 3 percent on a monthly basis but is up 19 percent on a year-over-year basis.

Spending in the water supply category fell 4.5 percent on both monthly and yearly bases.

Construction spending in the transportation category fell 0.6 percent on a monthly basis but has expanded by 6 percent on an annual basis.

Amusement and recreation-related construction spending fell 1.1 percent on a monthly basis but is up 9.2 percent from the same time last year.

Highway and street-related construction spending fell 10.4 percent in June and is down 8.5 percent compared to the same time last year.

Communication construction spending fell 4.9 percent for the month and is down 12.9 percent from the same time last year.

Public safety-related construction spending fell 2.4 percent on a monthly basis and has declined 5.1 percent on a year-over-year basis.

Power construction spending fell 3.3 percent for the month, but is 19 percent higher than at the same time one year ago.

spending_8 1To view the previous employment report, click here

DOT Update on Status of Highway Trust Fund

Unknown

The Secretary of Transportation

Washington, DC 20590

August 5, 2014

Dear Colleague:

As you will recall, on July 1, I notified you of the precarious state of the Highway Trust Fund and the Department’s plan for managing the resources available to transit agencies through the Mass Transit Account if the shortfall continued into the fall.

As a result of the short-term fix for the Highway Trust Fund that Congress passed on July 31, I am writing to let you know that we will not need to implement these cash management procedures at this time.

While I am pleased that Congress took action to avoid the immediate insolvency of the Highway Account this summer, I am disappointed that they merely kicked the can down the road again. This is the tenth surface transportation extension-on top of eighteen short term budget measures–in the last 6 years. There is still no long-tem1 certainty. Worse still, this latest band-aid expires right as the next construction season begins, setting up another crisis next spring. So in the coming months, the Department will again be required to prepare cash management procedures in anticipation of repeating the same Highway Trust Fund insolvency crisis.

Americans deserve a multi-year transportation bill that provides the certainty that businesses and communities deserve, creates jobs, and makes necessary policy updates to lay the foundation for lasting economic growth. As the Senate demonstrated with its bipartisan vote on July 29, there is no reason Congress cannot act on a long-term solution this year. Our transportation infrastructure is too essential to suffer continued neglect, and I hope that Congress uses this opportunity productively. I urge you to stand with me in calling on Congress to commit itself to a sound, bipartisan, and long-term solution that will ensure the stability of the surface transportation system of our Nation for the next several years.

Sincerely,

Anthony R. Foxx