Tag Archive for 'non-residential'

ABC Reports: Nonresidential Fixed Investment Expands 5.5 Percent During Robust Second Quarter

CEU2“The robust second quarter growth was primarily driven by higher consumer and business spending, ” —ABC Chief Economist Anirban Basu.

GDP_Q2_2014Nonresidential fixed investment expanded 5.5 percent and residential fixed investment expanded 7.5 percent during the second quarter of 2014 according to a July 30 release by the Bureau of Economic Analysis. Overall, real gross domestic product (GDP) increased 4 percent (seasonally adjusted annual rate) during the second quarter of 2014 following a 2.1 percent decrease (revised from -2.9 percent) in the first quarter.

“The robust second quarter growth was primarily driven by higher consumer and business spending,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Today’s 4 percent reading on second quarter GDP blew away consensus expectations of 3 percent, and the first quarter wasn’t quite as bad as suspected either. Viewed collectively, the data indicate that the U.S. recovery should exhibit decent momentum through the balance of the current year and into 2015.

“Nonresidential fixed investment expanded even more briskly than the broader economy,” said Basu. “However, the rebound from the dismal first quarter was broad-based; federal government spending was the only segment that contracted during the second quarter.”

Estimates for 2013 were revised to 2.2 percent growth, up from 1.9 percent in previous estimates. However, the revisions also show that the economy grew at a slower pace from 2009 to 2012 than previously thought. “This recovery was already the weakest in U.S. history,” said Basu. “Since the recession ended in the second quarter of 2009, the economy has grown at an average annual rate of just 2.3 percent (revised down from 2.4 percent in previous estimates).

“Despite the slow and laborious recovery, there is reason for optimism,” said Basu. “Today’s announcement marks the nonresidential fixed income segment’s strongest quarter since the beginning of 2012. In light of this positive data, expect nonresidential employment growth and construction spending—both of which will be released on Friday—to continue to trend higher.”

The following segments expanded during the second quarter and/or contributed to GDP.

Personal consumption expenditures added 2.5 percent to GDP after contributing 1.2 percent in the first quarter.

Spending on goods grew 6.2 percent.

Real final sales of domestically produced output—minus changes in private inventories—increased 4.3 percent after a 0.4 percent increase in the first quarter.

National defense spending expanded 1.1 percent after falling 4.0 percent in the first quarter.

State and local government spending expanded 3.1 percent during the second quarter after falling 1.3 percent in the first quarter.

Two key segments did not experience quarterly growth.

Federal government spending fell 0.8 percent in the second quarter following a 0.1 percent decrease in the prior quarter.

Nondefense spending fell 3.7 percent after gaining 6.6 percent in the previous quarter.

To view the previous GDP report, click here.

ABC Reports:Nonresidential Construction Gains Jobs In January

CEU2“The hope is that the lull in employment expansion will end shortly as temperatures begin to rise.” —ABC Chief Economist Anirban Basu.

Spending_2 3The construction industry gained 48,000 jobs in January, according to the Feb. 7 employment report by the U.S. Department of Labor (DOL). Nonresidential construction gained 21,000 jobs, representing a significant rebound from the 14,100 jobs lost by the segment in December. Nonresidential construction accounted for 47.7 percent of January’s total construction industry job gain and 28.1 percent of the construction industry job gain in the past year.

The national construction unemployment rate expanded to 12.3 percent on a non-seasonally adjusted basis in January, compared with 11.4 percent in December. This was due to a combination of seasonal factors and may be impacted by the end of the government’s long-term unemployment benefits program, which may have induced people look for work in construction—an industry generally known to be in recovery.

“The fact of the matter is that we simply do not know with any conviction what is transpiring in the U.S. labor market,” said Associated Builders and Contractors Chief Economist Anirban Basu. “With respect to construction, January’s employment recovery is likely attributable in large measure to the fact that December construction employment was suppressed by weather. While January was also associated with bitter cold, large snowfalls and ice storms, the week during which the data was gathered last month represented a period of relative meteorological calm.”

According to the Bureau of Labor Statistics’ household survey, the national unemployment rate decreased a tenth of a percent in January to 6.6 percent. This represents the lowest unemployment rate since October 2008. The labor force participation rate increased from its historic low of 62.8 percent to 63 percent in January.

“Based on data regarding backlog, architectural billings and other leading indicators, the nonresidential construction outlook remains benign,” said Basu. “However, the last two months have not been good ones for job creation, according to this release. The hope is that the lull in employment expansion will end shortly as temperatures begin to rise.”

Nonresidential building construction employment expanded by 8,300 jobs for the month and is up by 21.9 jobs (3.3 percent) since January 2012.

Residential building construction employment rose by 13,200 jobs in January and is up by 52,200 jobs (8.8 percent) on an annual basis.

Nonresidential specialty trade contractors gained 12,900 jobs for the month and employment in that category is up by 28,400 jobs (1.4 percent) from the same time last year.

Residential specialty trade contractors gained 3,600 jobs in January and have added 69,200 jobs (4.6 percent) since January 2013.

The heavy and civil engineering construction segment gained 10,100 jobs in January and job totals are up by 6,800 (0.8 percent) on a year-over-year basis.

To view the previous Employment report, click here.

ABC: Private Nonresidential Construction Spending Continues To Climb In March

“The expectation is that privately financed construction volumes will continue to rebound gradually into the summer.” —ABC Chief Economist Anirban Basu.

Spending on private nonresidential construction increased 1.8 percent in March according to the May 2 report by the U.S. Census Bureau. While private nonresidential construction spending has been increasing for the past three months, it is still 10.2 percent lower from March 2010. Total nonresidential construction spending – which includes both privately and publicly financed construction – was $531.1 billion on a seasonally adjusted annual rate in March, up 0.9 percent from the previous month, but 6.1 percent lower than the same time last year.

(See Analysis below)

Ten of the sixteen nonresidential construction subsectors posted increases for the month including lodging, up 6.1 percent; manufacturing, 5.2 percent higher; health care, up 2.4 percent; power, up 1.8 percent; and office construction, 1.7 percent higher. Only four subsectors registered increases in spending compared to the same time last year with conservation and development 10.5 percent higher; highway and street up 4.9 percent; communication 4.7 percent higher; and power construction up 3.9 percent.

Of the six nonresidential construction subsectors posting decreases for the month, conservation and development was down 6 percent; communication was 2.5 percent lower; and water supply was down 1.9 percent. While posting significant increases for the month, several subsectors are lower compared to March 2010. They include lodging, down 31 percent; and manufacturing, down 28 percent. Other subsectors with decreases of more than 10 percent include religious, down 20.1 percent; public safety, down 17.6 percent; and office construction, down 13.7 percent.

Public nonresidential construction inched up 0.2 percent for the month, but was down 2.3 percent year-over-year. Residential construction spending increased 2.4 percent in March but is down 8 percent from the same time last year. Overall, total construction spending – which includes nonresidential and residential construction – grew 1.4 percent in March, but is 6.7 percent lower compared to the same time last year.

Analysis

“The transition from publicly financed activities to privately financed ones continues,” said Associated Builders and Contractors Chief Economist Anirban Basu. “In contrast to the trends of the past year, construction related to lodging, office and manufacturing was up in March, an indication that the economic recovery that began in mid-2009 is finally beginning to influence the nation’s nonresidential construction sector.

“Of course, skeptics are likely to point out that observed improvement in construction volumes between February and March may largely be a reflection of seasonal factors rather than economic ones,” said Basu. “It is true that February’s harsh winter conditions in much of the nation were not conducive to ongoing construction and that at least part of the monthly recovery is related purely to the weather.

“However, despite the recent uptick in privately financed construction, publicly financed construction continues to remain strong. One year ago, publicly financed construction represented 51.4 percent of total nonresidential construction spending. In March 2011, that proportion stood at 53.4 percent, slightly down from February’s corresponding statistic of 53.9 percent,” Basu said.

“It’s important to note that after recent declines in healthcare-related construction spending, healthcare construction was up in March and power-related construction expanded for two consecutive months. The expectation is that privately financed construction volumes will continue to rebound gradually into the summer even as certain publicly financed construction segments, such as public safety and education, will experience diminished spending,” said Basu.

Nonresidential Construction Spending Dips in December 2010

The question becomes whether the data indicate an end to a short period of recovery, or whether the recovery was temporarily halted by snow and cold temperatures.ABC Chief Economist Anirban Basu.

Blame it in part on the bad weather, total nonresidential construction spending – which includes both privately and publicly financed construction – dipped 1.6 percent in December 2010, and is down 6.4 percent from December 2009. This, according to the February 1 construction spending report by the U.S. Census Bureau: Total nonresidential construction spending totaled $552.2 billion in December on a seasonally adjusted annual rate. (See Analysis below)

Meanwhile, private nonresidential spending slipped 0.5 percent in December following three straight months of increases, and is down 12.3 percent from the same time one year ago.

Thirteen construction subsectors experienced monthly decreases in spending, including conservation and development, dropping 17.1 percent; religious, down 6.5 percent; and public safety-related construction, down 6.4 percent. Year-over-year, those construction subsectors posting the largest decreases include lodging, down 44.1 percent; office, down 25.7 percent; and manufacturing, down 24.6 percent.

Only three of the sixteen construction subsectors posted increases in December. They are power, up 2.1 percent; communication, up 1.6 percent; and transportation, up 0.7 percent. Six subsectors finished the year higher in terms of construction spending including power, up 13 percent; highway and street, up 7.6 percent; and amusement and recreation, up 4.4 percent.

Public nonresidential construction fell for a second consecutive month, down 2.6 percent in December and 0.5 percent year-over-year. Residential construction spending fell 4.4 percent for the month and 6.3 percent from the same period one year ago. Total construction spending – which includes both residential and nonresidential – dropped for the third straight month, down 2.5 percent in December 2010 and down 6.4 percent from December 2009.

Analysis

“Without a doubt, the nation’s weather played a role in shaping the December construction spending data,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Prior to December, private nonresidential construction spending was rising in America. However, the question becomes whether the data indicate an end to a short period of recovery, or whether the recovery was temporarily halted by snow and cold temperatures.

“There is evidence to suggest that the impact of federal stimulus spending is steadily exiting the construction spending data. For instance, the largest monthly decline among the sixteen nonresidential construction sectors was in conservation and development, a segment closely related to federal spending and investment,” said Basu.

“Public safety-related spending also declined sharply in December, which may reflect sharp cuts in state and local government spending. In other words, the outlook for publicly financed construction is dimming and the December data fit neatly with that outlook,” Basu said.

“The construction segment with arguably the brightest outlook going forward is power. With oil prices above $90 a barrel, there is reason to believe that power will be a bright spot for nonresidential construction spending this decade,” said Basu. “In addition, there remains a large amount of deferred maintenance to be completed within the nation’s power industry, which suggests that 2011 construction spending in that economic segment will expand.”

Daily Dirt

Alabama Non-Residential Construction UP!

German steel manufacturer ThyssenKrupp announced that construction of its $4 billion steel mill in Calvert, Alabama, is on schedule. Governor Bob Riley of Alabama (R) says there are currently 2,000 construction workers at the facility and the number could reach 10,000 later this year. The company had previously announced plans to delay production at the plant because of the global recession. However, company officials now say that they plan no delay in the construction of the mill. The plant, scheduled to begin operations next year, will employ more than 2,700 steel workers at full operation. It will serve industries including automotive, packaging, construction, electrical and utility, in addition to serving manufacturers of appliances, precision machinery and engineered products. .
The Birmingham Business Journal reported that non-building contracts, which includes work on infrastructure, airports and utilities, rose 6 percent to $132.2 million for the month in Alabama.
Statewide, contracts for commercial construction increased by 49 percent to $319.3 million for the month.

Contracts for future nonresidential construction rose to $63.9 million in January in the Birmingham area, compared to $41.3 million in January of last year. Contracts for future nonresidential construction rose to $63.9 million in January in the Birmingham area, compared to $41.3 million in January of last year.

On the gloomy side, residential contracts fell 28 percent for the Birmingham area to $31.5 million from $44 million a year ago and statewide residential contracts fell 32 percent to $214.9 million.

Block Kids

The Block Kids Building Program is a national competition that introduces children to the construction industry as a viable career choice. The Las Vegas Chapter of National Association of Women in Construction (NAWIC) sponsors the local competition with the Las Vegas area Boys and Girls Clubs and invites up to 70 children to participate.

The event is scheduled for Saturday, February 21, 2009 at the Donald Reynolds Boys & Girls Club at 2980 East Robindale Road in Henderson.

The competition, open to students in grades 1-6, challenges them to build various structures using interlocking blocks, string, foil and rock. The projects are judged by area architects, engineers, general contractors and other experts in the construction industry. Students have the opportunity to explain their project in detail, ask questions of the experts and receive encouragement for their efforts.

While the judges score and tally the entries, the children can decorate their own hardhats, play in a jumpy house, ride on a high-lift, get their picture taken and autographed by a local race car driver and enjoy the lunch provided by NAWIC and its sponsors. The first, second and third place winners receive trophies and construction related building projects to work on with their families.The grand prize winner advances to the regional competition, and one semi-finalist from each region is entered in the national program. National prizes are awarded to the top three projects.
Construction Workers Hold Candlelight Vigil In Las Vegas

Out of money and out of options, construction workers gathered by candlelight, looking to a higher power to pull them out of a financial hole. It’s a type of candlelight vigil never before seen: workers praying for jobs. They were men and women out of work and struggling to make ends meet – hoping to be saved by a new City Hall.

“We need jobs, we need jobs and we have faith in the fact that through prayer and coming together we’ll get jobs,” laborer William Arnold says.

“Build it and they will come” is the message from construction workers in Las Vegas who are increasingly desperate to stay employed. And what they’re fighting for is the much talked-about plan for a new City Hall. It got the green light from the City Council. Now, workers are making sure the project follows through, despite objections from the culinary union that says the potential $267 million price is too high.

Construction workers, in favor of the project, came out with candles Thursday night. They began what they promise will be a nightly vigil until the project gets off the ground.

Members of the Las Vegas Building and Construction Trades will hold candlelight vigils at the site of the proposed new Las Vegas City Hall at Main Street and Lewis every night from 6 pm until midnight until the project breaks ground.

“This project is vital to revitalizing our economy and providing badly needed jobs for many out of work Las Vegans,” said Tommy White, head of the Laborers Union Local 872. “We’re committed to making sure it becomes a reality as quickly as possible.”

Union officials estimate the project and others that are part of the City of Las Vegas’ downtown redevelopment plan could generate 13,000 jobs.

Greg Sitek