Tag Archive for 'economy'
In good news for taxpayers, the American Road & Transportation Builders Association (ARTBA) says the U.S. Environmental Protection Agency’s (EPA) December 19 decision not to regulate fly-ash, a byproduct of coal combustion to produce electricity, as a “hazardous material” will save American taxpayers $105 billion over the next 20 years.
That, research by the association’s foundation found, would be the additional cost to build roads, bridges and airport runways if fly-ash, widely recycled as a pavement mix additive, was not available as a building material.
The EPA’s rule will be setting new requirements for the storage of fly-ash.
ARTBA has been actively engaged in the regulatory and legislative debate in Washington over fly-ash since 2007 and applauded the decision as a “win-win” for both the taxpayer and the environment
The association notes the U.S. transportation construction sector is one of the most prolific recyclers in the world. In addition to recycling over 8 million tons of fly-ash annually as a pavement additive, road base or structural embankment fill, 70 million tons of asphalt pavement are also reclaimed and recycled as new pavement product.
Industrial production surged 1.3 percent in November as October’s initially reported decline was reversed to a slight gain. Manufacturing was the key driver with big gains this month and an upward revision in October.
Strong Report with Broad-Based Gains
The 1.3 percent increase in industrial production for November is the largest monthly pop in more than four years. It comes on the heels of an upward revision that moved last month from a slight decline to a slight gain in output. Manufacturing production was up 1.1 percent on the month with broad-based support. After three straight monthly declines for motor vehicles and parts, that series staged a comeback in November with a 5.1 percent monthly increase. But even excluding autos, manufacturing output was still up 0.9 percent.
The Weather Outside is Frightful
Over 50 percent of the lower-48 was blanketed in snow in November (including more than five feet in parts of Buffalo, NY). It was the largest snow-cover on record for the month of November. With wintry weather showing up in fall, it comes as little surprise that utilities output jumped 5.1 percent on the month.
What About Oil?
Oil prices ended November at roughly $66/barrel, but the average price for the month was still over $75/barrel (WTI crude). The much lower price environment for oil and other commodity prices will eventually cause equipment investment to slow in industries related to oil extraction, in our view. However, we have maintained that production would still hold up in the near term. Mining output fell in November, but oil was not to blame. Crude production was unchanged in November (in fact, it was up 1.1 percent before seasonal adjustment). “Other” mining (coal, metal ore, other minerals) was down 0.5 percent.
Empire Index: A Warning Shot or Just a Misfire?
In a separate report, the New York Federal Reserve’s Empire State manufacturing index unexpectedly slipped to negative territory in December. With all the discussion in financial markets about the impact of lower oil prices, it may feel like this miss is a warning that the factory sector is retrenching. We are not convinced that is what the numbers are telling us. The big movers among the subcomponents sound more like a supply chain disruption than a sudden shift in attitudes because of oil. Unfilled orders were off 24.0 points, delivery times were off 14.6 points and inventories were down 11.5 points. What about prices? How is the input cost side of production shifting? After 10.6 in November, prices paid came in at 10.4 in December, so no significant change. Prices received on the other hand, went from 0.0 last month to 6.3 in December. Still, the miss here in December should not be discounted completely; we will watch other regional Fed survey data for December with greater-than-usual interest.
“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