Tag Archive for 'residential construction'

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AGC Reports: Construction Unemployment Drops To 10.8 Percent, Lowest May Mark In Five Years As Industry Adds Jobs And Hours For The Month And Year-Over-Year 


AGCConstruction Employers Add 7,000 Jobs between April and May 2013, 189,000 since May 2012; More People Working in Construction since August 2009; Potential for Worker Shortages Grows, Officials Caution

Construction employment increased by 7,000 in May, helping to push the industry’s unemployment rate down to the lowest May level in five years, according to an analysis of new government data by the Associated General Contractors of America. Association officials said the relatively positive jobs report for the sector underscores the need to address potential shortages of skilled workers.

“Although the monthly job gain in May was modest, both residential and nonresidential construction have been adding workers at roughly double the rate of the overall economy in the past year,” said Ken Simonson, the association’s chief economist. “At the same time, formerly unemployed construction workers are finding jobs in other sectors, retiring or going back to school. These conditions may lead abruptly to worker shortages in parts of the industry, such as welders and pipefitters.”

Construction employment in May totaled 5,804,000, an increase of 189,000 or 3.4 percent over the past year. Aggregate weekly hours of all new and existing construction employees expanded by 5.2 percent from a year earlier. The unemployment rate for workers who last worked in construction dropped to 10.8 percent from 14.2 percent in May 2012, not seasonally adjusted, and the number of unemployed construction workers shrank over the year by 259,000 to 891,000. The latest numbers were the best May figures for each series since May 2008, Simonson noted.

Employment expanded in both residential and nonresidential construction in May, Simonson observed. Residential building and specialty trade contractors added 5,500 workers for the month and 94,400 (4.6 percent) over 12 months. Nonresidential building, specialty trade and heavy and civil engineering construction firms grew by 1,700 workers in May and 95,500 (3.7 percent) from a year earlier. In a positive indicator for future construction growth, architectural and engineering services employers added 2.1 percent to their workforces over the year.

Association officials said there was still time to avoid some of the future worker shortages that will come if the industry continues to add jobs over the coming months. They urged education officials to rebuild skills-based, or vocational, educational programs designed to help prepare students for careers in construction and manufacturing. And they urged Congress and the administration to reject the arbitrary caps on construction workers that are currently included in proposed immigration legislation.

“Just as contractors found ways to cope with the downturn, we need to make sure we are able to address the challenges that will come with the sector’s eventual recovery,” said Stephen E. Sandherr, the association’s chief executive officer. “One of the biggest challenges this industry faces is limited supply of skilled construction workers available to meet the kind of demand we all hope the industry will soon experience.”

Wells Fargo Reports: Housing Starts Plunge in April as Weather Holds Back Activity

Wells_Fargo_Securities_logoAfter a blowout report in March, starts plunged 16.5 percent in April, with both single- and multifamily starts tumbling. Permits rose sharply, however, and builders sound downright giddy about sales prospects.

 April’s 16.5 percent plunge in housing starts is less alarming when paired with the 14.3 percent rise in permits reported that month. Inclement weather likely delayed some starts, which should produce a nice rebound in May.

 

Starts Tumbled Back Below Permits

 After spiking in March, multifamily starts plunged 38.9 percent in April and were responsible for most of the swing in overall starts. Multifamily permits rose nearly 40 percent in April.

Single-Family Starts Dip, But Builders Sound Giddy

 Single-family starts fell 2.1 percent in April, marking the second consecutive monthly drop. Starts had been running ahead of permits, however, so the drop was not a surprise. Permits for single-family homes rose 3.0 percent to a 617,000-unit pace.

 Builder confidence improved in May and the tone of recent builder conferences has been downright giddy. Demand is improving but lots, labor and materials are in short supply.

Housing Starts Housing Starts and Building Permmits Well Fargo Single and Multi 

Wells Fargo Economics Group Reports: New Home Sales Rebound in November

Wells_Fargo_Securities_logoNew home sales rose in November to a 377,000-unit pace, which is the highest level since April 2010. Gains were concentrated in the Northeast and South. The median price is up 14.9 percent over the past year.

New Home Sales Activity Shows Solid Gain

· New home sales rose more than expected in November to a 377,000-unit pace, from a downwardly revised 361,000-unit pace in October. Sales activity rose in the Northeast and South but tumbled in the Midwest and West. The South, which accounts for just over half the nation’s new home sales, posted a 21.1 percent gain in November. Regarding the Northeast, the impact of Hurricane Sandy is still difficult to measure.

Lean Inventories and Rising Prices Give Hope

· Sales activity for new home purchases through November 2o12 are running 19.4 percent ahead of their year-ago pace. The continued upward trend in new home sales is being boosted by lean inventories and rising home prices, which continues to drive improving builder sentiment.

· The months’ supply fell in November to 4.7 months, from a revised 4.9 months in October.

Wells Fargo Equipment Finance, Inc. Construction Quarterly Q4 Report Is Encouraging

{ad0490b3-831f-4b5d-862e-f81af193e57a}_425_CQHeaderFrom that report:

Unemployment. The October 2012 Employment Report from the U.S. Labor Department showed yet another gain of 147,000 private sector jobs (government employment was down 1,000). The unemployment rate now stands at 7.7%, a decrease of 0.2% from the previous month primarily due to a decrease in the number of individuals looking for work. The private sector continues to lead the job creation. The Wells Fargo Economics Group maintains its forecast of unemployment to remain at about 7.8% throughout 2013.

Real Gross Domestic Product (GDP). The U.S. economy improved at a much better rate than initially reported as the U.S. Department of Commerce revised its Q3-2012 GDP number up from 2.0% growth to 2.7%. Full year GDP growth for 2012 will likely come in at around 2.2% as companies continue investing in equipment and technologies but hold back on hiring. If the U.S. can avoid casting itself over the “fiscal cliff” and if Europe can outlast its prolonged credit crisis, the Wells Fargo Economics Group forecasts a rather lackluster full year GDP growth of 1.4% in 2013.

U.S. Non-Residential Construction. Private non-residential construction spending for October 2012 is up 10.7% compared to October 2011 due to increased spending in the power, manufacturing and commercial sectors. In contrast, public non- residential construction is down 1.0% from a year ago even as it eked out a gain of 0.8% compared to September 2012. State transportation budgets face continued strain and investment in highway and street construction was down 5.0% from a year ago.

Fuel prices. The price of gasoline declined steadily through October and November to a monthly national average of $3.44 per gallon, the lowest average since July. Even as drivers received a respite after a summer of near $4 per gallon fuel, these prices are still at record highs for this time of year. The average annual price of gas for 2012 ($3.63 per gallon) will be the most expensive on record and is 12 cents more than the current record high set last year. (Data source: AAA)

Housing. The residential housing market is one of the shining stars of the U.S. economy at present which may be a surprise given that in 2011, housing starts totaled about 610,000 units. Home values are slowly on the rise as are housing starts, which will total about 780,000 units in 2012. Mortgage rates are likely to remain near record lows and should con- tribute to housing starts that approach the 1 million unit mark in 2013.

Consumer Price Index. Retail pricing pressures eased somewhat during 2012 to about 2.2% compared to 3.1% in 2011. The Wells Fargo Economics Group forecast for overall inflation, which includes fuel and food, is expected to nudge up to 2.5% in 2013.

Producer Price Index. Wholesale prices moderated somewhat in 2012 only slightly to 2.3% following price increases of about 6.0% in 2011. For 2013, the Wells Fargo Economics Group is expecting wholesale pricing pressures to settle in at around 3.2%.

Interest rates. In an effort to promote growth, the U.S. Federal Reserve has signaled an intention to keep interest rates low for at least another year. The European debt crisis has extended a flight to safety that may keep yields on 10-year U.S. notes below 2.0% through 2013.

To view the full report click here.

ABC Reports: Construction Industry Unemployment Rate Drops to 12.8 Percent in June

“The employment expansion in nonresidential construction is, at least in part, a reflection of the way the economy finished last year, which was on a relative strong note.” —ABC Chief Economist Anirban Basu.

 

With the addition of 2,000 jobs last month, the nation’s construction industry unemployment rate fell to 12.8 percent in June, down from 14.2 percent in May, according to the July 6 employment report by the U.S. Labor Department. One year ago, the construction unemployment rate was 15.6 percent.

The number of unemployed construction workers now stands at 1.04 million, down from 1.32 million a year ago. However, much of this improvement is attributable to a decline in the size of the construction workforce, which now totals 8.12 million people, down from more than 8.44 million people a year ago.

June’s construction employment gains were primarily the result of a 10,000 job increase among specialty trades contractors. Employment in the specialty trades contractor segment is up 15,900 jobs, or by 0.5 percent, on a year-over-year basis. Nonresidential specialty trades contractors added 7,600 jobs for the month and have gained 14,100 jobs, or 1 percent, during the past year.

In contrast, nonresidential building construction employment declined by 1,000 last month to 657,500. Employment in this category is still higher relative to a year ago by 4,300 jobs, or 0.7 percent. Heavy and civil engineering construction employment decreased by 2,000 jobs for the month and has fallen by 1,800 jobs, or 0.2 percent, from the same time last year.

Residential building construction employment slipped by 5,900 jobs last month and is down by 5,200 jobs compared to a year ago. Employment in this sector now stands at 556,600.

Overall, the nation added 80,000 jobs in June and 1.8 million jobs during the past twelve months. The private sector added 84,000 jobs, while the government sector lost 4,000 jobs. June represents the 28th consecutive month of private sector job growth in the United States. However, the unemployment rate remained unchanged for the month at 8.2 percent, down from 9.1 percent in June 2011.

Analysis

“Today’s employment report is a bit of good news for the construction industry, but is widely viewed as disappointing,” said Associated Builders and Contractors Chief Economist Anirban Basu. “During the first three months of this year, the nation added 226,000 monthly jobs on average. During the past three months, the average monthly gain has been just 75,000 jobs.

“Many economic forecasters expect sluggish job growth during the balance of the summer and into the fall due to ongoing global economic slowing and various sources of uncertainty in the United States, including issues with respect to federal tax and budgetary policy,” Basu said.

“The employment expansion in nonresidential construction is, at least in part, a reflection of the way the economy finished last year, which was on a relative strong note,” said Basu. “Fourth quarter 2011 GDP growth was 3 percent.

“The associated increase in investor/developer confidence likely pushed many projects ahead, which helps explain the 10,000 increase in jobs among specialty trades contractors in June,” Basu said. “The economy today is likely expanding at less than 2 percent, consistent with expectations of flat nonresidential construction spending and suppressed hiring over the near-term.

“Given recent progress in Europe regarding sovereign debt and banking issues, as well as some recent signs of legislative progress in the United States, the level of economic uncertainty may abate somewhat over the near-term,” said Basu. “That would help reignite nonresidential construction’s recovery, though improvement in industry fortunes is unlikely to be immediate.”

To view the previous employment report, click here.