Tag Archives: nonresidential construction

construction industry

Construction Industry Loses 7,000 Jobs In March

The construction industry lost 7,000 jobs in March, inching the unemployment rate up to 17.2 percent from 17.1 percent in February, according to the April 6 Department of Labor employment report. Year over year, construction industry unemployment is down compared to the March 2011 rate of 20 percent. The construction industry added 55,000 jobs over the past 12 months.

The nonresidential construction sector lost 6,000 jobs for the month, but year over year has added 7,000 jobs, or 1.1 percent, bringing the total number of jobs to 659,400. Residential construction lost 5,000 jobs for the month and has added 3,000 jobs during the past 12 months, or 0.4 percent, to reach 569,000 jobs.

Nonresidential specialty trade contractors shed 5,000 jobs in March, while residential specialty trade contractors added 5,000 jobs and heavy and civil engineering construction employment saw a gain of 4,000 jobs. Year over year, nonresidential specialty trade contractors have lost 4,000 jobs, or 0.2 percent; residential specialty trade contractor employment grew by 29,000 jobs, or 2 percent; and heavy and civil engineering construction employment increased by 20,000 jobs, or 2.4 percent.

Across all industries, the nation added 120,000 jobs in March. The private sector expanded by 121,000 jobs and the public sector shrank by 1,000 jobs. On a yearly basis, the nation has added 1,899,000 jobs, or 1.5 percent. The national unemployment rate stood at 8.2 percent in March, down from 8.3 percent in February, with the labor force shrinking by 164,000 people.

“Today’s employment report was disappointing, particularly for the construction industry,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “The first quarter of 2012 will be judged as a step backward for the industry as construction spending levels stagnated and employment momentum disappeared.

“A certain level of weakness was anticipated due to the economic slowdown during the spring and summer of last year that caused many projects to be put on hold and resulted in diminished construction momentum,” Basu said. “In addition, ABC’s Construction Backlog Indicator, a predictor of construction activity, dipped during last year’s fourth quarter, setting the stage for the declines in construction employment now being observed.

“This employment report differed from the prior three months because employment growth was disappointing for the broader economy as well,” Basu said. “The consensus coming into today’s release was the nation would have added approximately 200,000 jobs in March, which did not happen.

“Some attribute the disappointing March report to abnormally warm weather across the nation, which caused February’s employment to be artificially high. However, one month does not make a trend and other data remain upbeat, including consumer activity and overall economic momentum. Economists and others will be looking for signs of improvement in labor market dynamics in April,” Basu said.

Real Estate/Construction in Arizona

Construction Spending Up 0.7%, Driven By Surge In Power, Public Projects

Total construction spending increased by 0.7 percent in October, driven largely by growing demand for power projects and public construction, the Associated General Contractors of America noted today in an analysis of new Census Bureau data.

The new data, however, indicated continued weakness in many construction categories, including private nonresidential and single family construction, association officials observed.

“Without any upward trend in key private-sector construction components like homes and office buildings, it is hard to feel optimistic about the near future,” says Ken Simonson, the association’s chief economist. “With public construction at risk of cutbacks, it is premature to conclude that construction has awakened from its long nightmare.”

Simonson added that power construction increased by 8.8 percent between September and October at a seasonally adjusted rate, although the total remained 3.9 percent below the year-ago level. Public construction, aided by federal spending on stimulus, military base realignment and Gulf Coast hurricane-control projects, edged up 0.4 percent for the month and 2.2 percent year-over-year.

Private nonresidential construction, however, slumped 0.7 percent in October, leaving the total 20.7 percent below the October 2009 figure. All 11 of the Census Bureau’s private nonresidential categories were below year-ago levels, Simonson added, with only private power and transportation showing gains from September.

Private residential investment jumped 2.5 percent for the month. However, Simonson cautioned that the apparent leap is attributable to a 3.2 percent advance in new multi-family construction and a 6.2 percent rise in improvements to existing properties, whereas single-family construction sank 1.2 percent for the month.

Association officials said that a proposal released today by the Deficit Commission to increase investments in highways, bridges and transit system construction provided some room for optimism. They urged Congress to embrace the transportation proposal, noting it would help the economy over the long run while giving a much-needed boost to short term construction demand.

“The best way to reduce the deficit and simultaneously support a strong and expanding economy is to invest in our aging network of highways, bridges and transit systems,” said Stephen E. Sandherr. “Even as the broader report calls for dramatic reductions in federal spending, it is clear that our country can’t afford to neglect its infrastructure.”

Construction at an All Time Low

National Construction Employment Near 14-Year Low

The number of people working in construction is approaching a 14-year low now that the industry lost 21,000 jobs in September, while construction unemployment is at a September high of 17.2 percent, according to an analysis of federal employment figures released today by the Associated General Contractors of America.

The construction industry continues to suffer from declining investments in construction and broad uncertainty about the future of many federal infrastructure programs and tax rates, association officials noted.

“It has taken less than four years to erase a decade’s worth of job gains as the industry suffers from declining private, state and local construction demand,” said Ken Simonson, the association’s chief economist. “No other sector of the economy has suffered as much for as long as construction.”

Simonson noted that the 5.6 million people working in construction today is barely higher than the 5.59 million people who were working in construction in August 1996. He added that construction employment continued to lag behind other sectors of the economy. For example, while total private employment rose by 593,000 during the past 12 months, the construction industry lost 210,000 jobs. Meanwhile, the industry’s unemployment rate is nearly double the unadjusted national rate of 9.2 percent.

Most of September’s construction job losses came from the nonresidential sector as demand for commercial facilities and infrastructure projects remains weak, Simonson noted. Residential construction lost 2,500 jobs last month while nonresidential construction lost 18,100 jobs. Nonresidential specialty trade contractors were the hardest hit, having lost 19,500 jobs in September, the economist added.

Association officials noted that construction spending figures released late last month show private, state and local construction spending continues to decline. And while federal spending has increased, most of those investments have come from temporary programs like the stimulus and military base realignment programs.

While these temporary federal programs have helped the industry, many contractors are reluctant to expand payrolls while long-term federal programs that fund highway, transit, water system and aviation related construction remain in limbo, association officials said. They added that most contractors don’t even know what their tax rates will be for next year.

“Construction firms aren’t going to start hiring again until they can predict how busy they’ll be,” said Stephen E. Sandherr, the association’s chief executive officer. “Frankly it is hard for contractors to make any business decisions when they don’t know how much they’ll make or how much they’ll owe.”