Tag Archive for 'non-residential construction'

ABC Reports : Nonresidential Construction Down in March, Says ABC Private Sector Falters, Public Sector Unchanged

Nonresidential construction spending declined 0.3 percent in March, according to an Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data released today. Nonresidential spending, which totaled $740.9 billion on a seasonally adjusted, annualized basis, has expanded 2.5 percent on a year-over-year basis. February’s spending estimate was revised roughly $10 billion higher, from $732.8 billion to $742.8 billion, rendering the March decline less meaningful.

Private sector nonresidential construction spending fell 0.4 percent on a monthly basis but rose 2.2 percent from a year ago. Public sector nonresidential spending remained unchanged in March, but it is up 2.9 percent year-over-year.

“The nonresidential construction spending data emerging from the Census Bureau continue to be a bit at odds with other data characterizing growth in the level of activity,” said ABC’s Chief Economist Anirban Basu. “For instance, first quarter GDP data indicated brisk expansion in nonresidential investment. Data from ABC’s Construction Backlog Indicator, the Architecture Billings Index and other leading industry indicators have also been suggesting ongoing growth. Despite that, private nonresidential construction spending is up by roughly the inflation rate, indicating that the volume of services delivered over the past year has not expanded in real terms.

“That said, most economists who follow the industry presumed that March data would be somewhat soft,” said Basu. “The Northeast and Midwest were impacted by unusually persistent storm activity in March. The same phenomenon impacted March’s employment estimates, which indicated that construction actually lost 15,000 jobs that month. Other weather-sensitive industries, including retail trade, also experienced slow to negative job growth in March.

“The upshot is that CEOs and other construction leaders should remain upbeat regarding near-term prospects despite today’s construction spending report,” said Basu. “Leading indicators, including a host of confidence measures, collectively suggest that business investment will be on the rise during the months ahead. Improved state and local government finances should also support additional nonresidential construction activity.

“At the same time, construction industry leaders must remain wary of a sea of emerging risks to the ongoing economic and construction industry expansions,” said Basu. “Interest rates are on the rise. Materials prices, including those associated with softwood lumber, steel, and aluminum, are expanding briskly. Wage pressures continue to build. There are also issues related to America’s expanding national debt, increasingly volatile financial markets, the geopolitical uncertainty that has helped to propel fuel prices higher, and lack of transparency regarding America’s infrastructure investment intentions. The challenge for construction CEOs and others, therefore, is to prepare for growing activity in the near-term, but for something potentially rather different two to three years from now.”

AGC Reports: Construction Sector Adds 16,000 Jobs In June Following Three-Month Lull As Industry Unemployment Rate Drops To Lowest Level In Series History

Contractors Struggle to Fill Jobs despite Hourly Earnings 10 Percent Higher than Private-Sector Average;  Association Officials Call for Measures to Make it Easier to Set Up Construction Training Programs

Construction employment increased by 16,000 jobs in June to the highest level since October 2008, signaling a new burst of hiring after three months of pause, according to an analysis of new government data by the Associated General Contractors of America. Association officials urged federal, state and local lawmakers to enact measures to make it easier for school officials, local associations and construction firms to set up construction training programs.

“Construction firms added employees over the past year at nearly double the rate of the overall economy, but the record-low unemployment rate for construction workers shows companies are having to reach outside the industry to fill positions,” said Ken Simonson, the association’s chief economist. “Finding any qualified workers will likely become even harder with low unemployment throughout the economy.”

Construction employment totaled 6,896,000 in June, a gain for the month of 16,000—nearly double the 9,000 jobs added in the previous three months combined, the economist noted. The June level constituted an increase of 206,000, or 3.1 percent, from a year ago. The year-over-year growth rate was almost double the 1.6 percent rise in total nonfarm payroll employment. The sector’s unemployment rate in June virtually matched the rate for all workers at 4.5 percent, the lowest June level for construction since the series began in 2000.

Average hourly earnings in the industry climbed to $28.82, an increase of 2.5 percent from a year earlier.  The economist noted that construction pays nearly 10 percent more per hour than the average nonfarm private sector job in the United States, which pays $26.25 on average per hour.

Residential construction—comprising residential building and specialty trade contractors—added 6,000 jobs in June and 115,600, or 4.5 percent, over the past 12 months. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 10,300 jobs in June and 90,600, or 2.2 percent, over 12 months.

Construction officials cautioned that construction employment gains would likely have been higher if it were easier for firms to find workers to hire. Instead, firms are asking current employees to work longer hours to keep pace with demand. They urged lawmakers at all levels to enact measures that give educators and employers greater flexibility to set up and run construction training programs. In particular, they called on Senators to enact a new Perkins Act measure that passed in the House last month. 

“More young people would be able to find jobs in construction that pay better than other industries if there were more opportunities to expose students to the sector,” said Stephen E. Sandherr, the association’s chief executive officer. “It is time to fix an education system that is preparing too many students for jobs that don’t exist while too many jobs go unfilled because graduates lack the skills employers need.”AGC Reports: 

According to ABC, Jobs Report Offers Reasons for Hope and Concern for Construction Industry

National construction employment added 11,000 net new jobs on a seasonally adjusted basis in May according to analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC).

The nonresidential construction sector added 4,400 net new jobs in May after losing 1,000 net jobs in April (revised down from a net increase of 3,200 jobs), while the residential sector added 7,100 net jobs for the month. Overall construction employment expanded 2.9 percent on yearly basis, well above the year-over-year growth rate of 1.6 percent for all nonfarm industries.

“Today’s jobs numbers supply a mixture of good and bad news,” said ABC Chief Economist Anirban Basu. “Overall nonresidential construction industry employment was up, but much of that was due to the heavy and civil engineering component, which can be associated with volatile employment levels from month-to-month. Nonresidential specialty trade contractors collectively shed employment, which is consistent with the weak construction spending numbers released yesterday. Those statistics indicated ongoing softening in construction spending in both private and public segments.

“More worrisome perhaps are statistics related to labor force participation and the construction industry unemployment rate,” said Basu. “The labor force participation fell to 62.7 percent in May, a multi-month low. There is also evidence that the construction labor market continues to tighten, which implies construction firms will continue to struggle to find workers, particularly at higher skill levels. This means that construction spending growth is decelerating even as labor becomes more expensive. None of this is good from the perspective of profit-margins or aggregate industry profitability.

“The hope is that the observed weakness in spending is brief and largely a result of lingering uncertainty that would be associated with any major political transition,” said Basu. “Financial markets continue to perform brilliantly, implying that investors continue to view economic conditions favorably. With the construction unemployment rate remaining so low one further hopes that more job seekers will be induced to seek employment in the construction trades. Unfortunately, to date that has not happened at sufficient levels. That said, economists remain confident that the next two quarters will be associated with more robust growth, which could help to reinvigorate construction spending momentum.”

The construction industry unemployment rate, which fell 2.1 percentage points last month, declined further in May and now stands at 5.3 percent. The construction industry unemployment rate is only available on a non-seasonally adjusted basis. Due to seasonal factors, the industry unemployment rate almost always plummets from March to April and continues to decline in May. The national unemployment rate inched down from 4.4 percent in April to 4.3 percent in May. The last time the unemployment rate was this low was in May 2001.

ABC Reports: Construction Job Growth Accelerates Amid Optimistic Post-Election Outlook in November

1291931467352794367The U.S. construction industry added 19,000 net new jobs in November and has now added jobs for three consecutive months, according to analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC).

Industry employment is up by 2.4 percent on a year-over-year basis, considerably faster than the overall economy’s 1.6 percent job growth rate. Construction industry employment growth would likely be much sharper if more suitably skilled or trainable workers were available to fill available job openings. The skilled labor shortage appears to be impacting nonresidential activity more than residential. The nonresidential sector added 1,100 net new jobs in November, while the residential sector added 19,600 positions. Heavy and civil engineering lost 2,100 jobs for the month.

“The demand for construction talent was strong before the election, and the outcome has improved the near-term outlook for private and public construction activity,” said ABC Chief Economist Anirban Basu. “The implication is that demand for construction workers is positioned to remain high, which will translate into gradual reduction in industry unemployment and significant wage pressures.

“Some of these wage pressures are already evident,” said Basu. “Construction firms in the nation’s hottest markets, including New York, Seattle and Miami, report that in certain occupational categories, compensation is rising at a 10 percent per annum pace or more. This appears to be particularly true for construction superintendents and managers.

“Next year is shaping up to be a good one for both residential and nonresidential construction segments,” said Basu. “Of the two branches of the industry, nonresidential likely offers the larger upside. An infrastructure-led stimulus package would largely be oriented around nonresidential activities. Moreover, in certain markets, there is evidence that the apartment market is approaching saturation. Expected increases in interest rates next year would also tend to hit certain residential activities (i.e., single-family construction) more forcefully.”

The construction unemployment rate remained unchanged at 5.7 percent in November. One might have expected that this rate would have declined given the generally elevated levels of demand for construction talent. However, there are certain parts of the country that are softer economically, including many commodity-rich communities that have been impacted by lower oil and natural gas prices. Moreover, it is difficult to assess the skill level of jobseekers.

The unemployment rate for all U.S. industries fell to 4.6 percent, the lowest rate since mid-2007 and 0.3 percentage points below October’s rate. The labor force lost 226,000 persons for the month, but is still more than 2 million people larger than at the same time one year ago.

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ABC Reports: Nonresidential Construction Adds Nearly 5,000 Jobs in November

CEU2“Nonresidential construction added nearly 5,000 jobs in November and the outlook remains positive.”—ABC Chief Economist Anirban Basu.

Employment November 2014The 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