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CONSTRUCTION EMPLOYMENT INCREASED IN 38 STATES AND D.C. FROM A YEAR AGO BUT DECLINED IN 27 STATES FROM MAY TO JUNE AS RECOVERY REMAINS “CHOPPY”
Florida Has Largest 12-Month Percent and Total Gains, New Jersey Has Biggest Annual Declines; South Dakota and Florida Top Monthly Rankings, Alaska and California Shed Most Jobs in June
Construction firms added jobs in 38 states and the District of Columbia over the past 12 months, but they reduced headcount in 27 states between May and June, according to an analysis today of Labor Department data by the Associated General Contractors of America. Association officials said the employment gains help, but that construction employment remains below peak levels in every location except North Dakota.
“The overall trend in construction employment remains favorable, with three-fourths of states adding jobs on a year-over-year basis,” said Ken Simonson, the association’s chief economist. “But the recovery remains choppy, not steady. In June, monthly gains occurred in fewer than half the states and the nation added just 6,000 construction jobs.”
Florida led all states in percentage and total gains in construction employment (11.5 percent, 41,700 jobs) between June 2013 and June 2014. Other states adding a high percentage of new construction jobs for the past 12 months included Nevada (10.5 percent, 5,900 jobs), Utah (9.3 percent, 6,800 jobs), North Dakota (7.9 percent, 2,600 jobs) and Minnesota (7,900 jobs, 7.8 percent). Other states adding a high total of new construction jobs during the past year included California (29,800 jobs, 4.7 percent), Texas (19,100 jobs, 3.1 percent), Pennsylvania (13,000 jobs, 5.8 percent) and Minnesota.
Twelve states shed construction jobs during the past twelve months, with New Jersey losing the highest percent and total, (-8.1 percent, -11,200 jobs). Other states that lost a high percentage of jobs include Alaska (-5.5 percent, -900 jobs), New Hampshire (-4.4 percent, -1,000 jobs) and New Mexico (-3.9 percent, -1,600 jobs). Besides New Jersey, other states that lost the most construction jobs between June 2013 and June 2014 included Arizona (-4,500 jobs, -3.6 percent), Alabama (-2,700 jobs, -3.4 percent) and Kentucky (-2,400 jobs, -3.6 percent).
Twenty-one states and D.C. added construction jobs between May and June. Florida (8,800 jobs, 2.2 percent) added the most jobs, followed by Illinois (3,500 jobs, 1.8 percent), Indiana (2,700 jobs, 2.2 percent) and Pennsylvania (2,700 jobs, 1.1 percent). South Dakota (4.3 percent, 900 jobs) had the highest percentage increase for the month, followed by Florida, Indiana and Montana (2.2 percent, 500 jobs).
Twenty-seven states lost construction jobs for the month, while construction employment was unchanged in Arizona and New Mexico. California (-9,500 jobs, -1.4 percent) lost the most construction jobs between May and June. Other states experiencing large monthly declines in total construction employment included New York (-3,700 jobs, -1.1 percent), Oregon (-3,600 jobs, -4.5 percent) and Texas (-3,400 jobs, -0.5 percent). Alaska (-7.7 percent, -1,300 jobs) experienced the highest monthly percentage decline, followed by Oregon, Rhode Island (-2.9 percent, -500 jobs) and Hawaii (-2.2 percent, -700 jobs).
Association officials noted that the number of states adding new construction jobs for the month declined compared to the prior month. Uncertainty around the future state of federal infrastructure funding prompted some construction firms to put expansion plans on hold, officials suggested. They urged the Senate to enact a House-passed bill that keeps federal transportation funding at current levels through May of next year and act on unfinished appropriations bills to fund other infrastructure measures.
“It is hard for firms to grow when they don’t know how much work will be available in just a few weeks,” said Stephen E. Sandherr, the association’s chief executive officer. He added that a series of measures designed to make it easier for states to attract funding for infrastructure that the president announced yesterday should help boost construction employment. View the state employment data by rank and state.
America is in desperate need of more trades people as employment levels surge and older workers leaving the industry are not being replaced by new apprentices, a leading economist within the building industry in the United States says.
In a recent statement, Associated General Contractors of America Chief Economist Ken Simonson said a surge in both hiring and offering worker overtime was encouraging, but pointed to a looming shortfall of workers and would eventually push up wages and trade prices.
“There is a limit to how much overtime workers can put in, and companies will be seeking to expand employment even faster if the volume of projects continues to grow” Simonson said. “But the huge drop in the number of unemployed former construction workers may make it harder to keep adding employees.”
Simonson’s comments come as growing momentum within the American building sector leads to more demand for skilled labor.
Whilst public construction spending remains flat, private spending on multi-residential and single residential buildings during March was up 13 percent and 33 percent year-on-year respectively, whilst a surge in communication related infrastructure has seen non-residential spending jump 8.6 percent over the same period.
Because of this, the total number of workers employed surged to seven year highs of 6,000,000 in April and unemployment (9.4 percent) is at seven year lows, with key hot areas including Monroe in Michigan, El Centro in California, Pascagoula in Mississippi and Idaho in Washington.
At the same time, the size of the workforce is shrinking. As trades people retired or left the industry due to poor conditions during the post-GFC downturn and the number of new apprentices coming through dropped, AGC now says the industry has 1.1 billion fewer workers than it did four years ago.
That is hurting everywhere. Doug Dhon, of Colorado based Dhon Construction recently told the Coloradoan newspaper there was a shortage of drywallers, plumbers, framers, masons, electricians and other skilled occupations, and that he did not have a signal project on the books that was adequately staffed with suitable trades – a situation which meant he and others were struggling to deliver work within agreed timeframes.
“When you can’t adequately man your projects, it puts you in a very hard spot for time” Dhon said.
“It’s a critical threat to my industry and the problem is here right now, today.”
Association officials say there has been a drop in the number of secondary-level construction training programs over the past few years, and have called on the governments at all levels to adopt measures to help schools, construction firms and local trade associations to conduct training programs for future workers.
“If elected and appointed officials don’t act soon to improve the quantity and quality of training opportunities for future workers, many construction employers will struggle to find the workers they need” AGC chief executive officer Stephen E. Sandherr said.
“It would be tragic if the construction industry can’t fill good-paying jobs because of a lack of trained recruits.”
Published on 08 May 2014
Did you Know?
Starting July 2014, design for the construction of new federal buildings will have to meet the energy efficiency standards in American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 90.1-2010 instead of ASHRAE 90.1-2007. The Department of Energy completed this action as part of a standard process for reviewing and adopting updated standards; and published the new rule on July 9, 2013, in the Federal Register. During its review, DOE found that the 2010 version of Standard 90.1 would save 18.2% more source energy than the 2007 version of Standard 90.1. Click here to read the rule online.
DOE also notes that there are a number of statutory provisions, regulations, Executive Orders, and memoranda of understanding that govern energy consumption in new Federal buildings. These include, but are not limited to, Executive Order 13514 (74 FR 52117 (October 8, 2009)); sections 323, 433, 434, and 523 of EISA 2007; Executive Order 13423 (72 FR 3919 (January 26, 2007)); the Guiding Principles for Federal Leadership in High Performance and Sustainable Buildings originally adopted in the Federal Leadership in High Performance and Sustainable Buildings MOU; section 109 of the Energy Policy Act of 2005 (Pub. L. 109-58); and 10 CFR Parts 433 and 435. The new rule supports and does not supplant these other applicable legal requirements for new Federal buildings.
Construction Materials Prices Increase Between December and January and for the Year, Even as Sequestration Risks Billions in Construction Cuts
Large Increases in Prices for Gypsum, Insulation, Lumber and Plywood Offset Declines in Asphalt, Steel Mill Products, and Iron Ore Cost To Boost Materials Prices 0.7 Percent for the Month, 1.3 Percent for the Year
Read more here…
Construction Jobs: Not Quite a Comeback Yet
by Annalyn Kurtz from CNN Money
Press Release from AGC America: Construction Spending Hits 17 month High in November with Monthly Gains in All Segments but Public Spending Down 5.3% Compared to Last Year
September jobs, August spending rise for construction; year-over-year gains are slim
Click here to view August metro construction employment numbers.
Seasonally adjusted nonfarm payroll employment increased by 103,000 (0.1%) in September and 1.5 million (1.1%) over 12 months, while the unemployment rate held steady at 9.1% (8.8%, not seasonally adjusted), the Bureau of Labor Statistics (BLS) reported on Friday. Seasonally adjusted construction employment rose by 26,000 (0.5%) to 5,551,000, the highest level since April 2010 but up only 37,000 (0.7%) from a year ago. The unemployment rate for former construction workers fell to 13.3%, not seasonally adjusted, from 17.2% in August 2010. (BLS does not report seasonally adjusted rates by industry.) The fact that unemployment fell sharply despite a very small increase in employment suggests that workers are leaving the industry to take work elsewhere, return to school or training, or drop out of the labor force—all ominous indicators for future recruitment. Among the five BLS construction employment categories, nonresidential building posted the strongest monthly and year-over-year results: gains of 2.0% and 3.2%, respectively. Heavy and civil engineering construction employment rose 0.7% and 1.2%; nonresidential specialty trade contractors, 0.5% and 0.9%; residential building, 0.3% and -1.3%; and residential specialty trades, -0.4% and -0.3%. Architectural and engineering services employment, a harbinger of future demand for construction, rose 0.2% and 2.4%.
Construction spending in August totaled $799 billion at a seasonally adjusted annual rate, up 1.4% from July and 0.9% from August 2010, the Census Bureau reported on October 3. Private nonresidential construction climbed 0.2% and 7.0%, respectively; private residential construction, 0.7% and 3.9%; and public construction, 3.1% and -6.3%. In descending order of current size, the largest private nonresidential segments were power (power plants, renewable facilities, transmission lines, oil and gas field structures and pipelines), up 2.9% and 26%; commercial (retail, warehouse and farm), -2.6% and 9.0%; manufacturing (including data centers), 1.8% and 3.2%; and office, 0.1% and 3.0%. Residential improvements slipped 0.3% from July’s total (which was revised sharply downward) but edged up 0.9% from August 2010; new single-family construction rose 0.8%5 for the month but fell 3.5% year-over-year; and new multifamily moved up 0.8% and 13%. Of the two dominant public categories, highway and street construction jumped 3.5% in August but fell 4.0% year-over-year and educational rose 4.3% and dropped 4.5%, respectively.
Construction employment increased between August 2010 and August 2011 in 146 out of 337 metropolitan areas (including divisions of larger areas) for which BLS provides data, an AGC analysis released September 26 showed. Another 145 areas had declines and 46 had no change. (BLS combines mining and logging with construction in many areas to avoid disclosing data about industries with few employers; data are not seasonally adjusted.) The equal split between gains and losses has been present for several months and reflects near-static national construction employment. The largest 12-month percentage gains were in the Lake County, Illinois-Kenosha County, Wisconsin division of the Chicago metro area (22%, 2,900 construction jobs); the Haverhill-North Andover-Amesbury, Massachusetts-New Hampshire division of the Boston area (19%, 700 combined jobs); Casper, Wyoming (18%, 500 construction jobs); and the Detroit-Livonia-Dearborn division (18%, 3,400 jobs). Houston-Sugar Land-Baytown had the largest number of job gains: 10,400 construction jobs (6%). The largest percentage losses were in Redding, California (19%, -600 combined jobs); Wilmington, North Carolina (-17%, -1,600 combined jobs); Montgomery, Alabama (-16%, -1,100 combined jobs); and Panama City-Lynn Haven-Panama City Beach, Florida (-16%, -800 combined jobs). The largest number of job losses occurred in the Los Angeles-Long Beach-Glendale division: -7,000 construction jobs (-7%).
The number of local housing markets on a new “improving markets index” (IMI) introduced in September by the National Association of Home Builders (NAHB) nearly doubled from 12 that month to 23 in the October 6 release (www.nahb.org/imi). “‘Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list,’ said [Chairman Bob Nielsen]. ‘While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced,’ said NAHB Chief Economist David Crowe. ‘In particular, Texas stands out for its seven entries on the improving markets list.’ Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits. The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving [metro areas:] employment growth from [BLS], house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.”
The first year of union wage and benefit settlements so far this year averaged $0.79 (1.6%), compared with $0.64 (1.3%) a year ago and $1.29 (2.7%) two years ago, the Construction Labor Research Council (www.clrcdata.org) reported last month. About 31% of settlements were for 1.0-1.9% increases; 18% each were for no increase or 3.0% or higher.
The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved
AGC Partners with LCI for Lean Construction Education
AGC and the Lean Construction Institute have launched a partnership designed to educate the construction community about the lean construction process. The first-ever lean construction education program will include the latest research and content thanks to an agreement announced today between the Associated General Contractors of America and the Lean Construction Institute. Both groups will now be able to work together to create additional resources for contractors about lean construction because of the new agreement. Learn about the Lean Construction Forum and the AGC Lean Construction Education Program. Click here to read more about the partnership.
For more information, contact Mike Stark at firstname.lastname@example.org or 703.837.5365.
The construction industry has been strongly affected by the credit crisis and recession that began in December 2007. Housing prices fell and foreclosures of homes rose sharply, particularly in overbuilt areas of the country. New housing construction, while still ongoing, dropped significantly. The recession is expected to impact other types of construction as well. Retailers are refraining from building new stores and State and local governments are reducing spending. However, as energy costs have risen, some companies are finding it necessary to build or renovate buildings that are not energy efficient. “Green construction” is an area that is increasingly popular and involves making buildings as environmentally friendly and energy efficient as possible by using more recyclable and earth-friendly products.
Construction, with 7.2 million wage and salary jobs and 1.8 million self-employed and unpaid family workers in 2008, was one of the Nation’s largest industries. About 64 percent of wage and salary jobs in construction were in the specialty trade contractors sector, primarily plumbing, heating, and air-conditioning; electrical; and masonry. Around 23 percent of jobs were in residential and nonresidential building construction. The rest were in heavy and civil engineering construction.
Prices of Key Construction Materials Fall in August, Even as Annual Materials Cost Increases
The amount contractors pay for a range of key construction materials declined in August, but contractors continue to be squeezed as materials cost increases have outstripped the price of finished buildings over the past year, according to an analysis of producer price index figures released today by AGC. For more information click here.