Tag Archives: Stephen E. Sandherr

Construction Employment

Construction Employment Declines In 165 Of 337 Metro Areas

Construction employment declined in 165 out of 337 metropolitan areas between July 2011 and July 2012, increased in 123 and was stagnant in 49, according to a new analysis of federal employment data released today by the Associated General Contractors of America.

Association officials said that the new data comes out as many metro areas continue to struggle with constricting public sector budgets and uneven private sector growth.

“Construction employment is healthy in the handful of areas where private sector demand is on the rebound,” said Ken Simonson, the association’s chief economist. “However, construction employment in most metro areas is suffering from the effects of tepid private sector demand and shrinking public sector construction budgets.”

The largest job losses were in Chicago-Joliet-Naperville, Ill. (-6,500 jobs, -5%); followed by Tampa-St. Petersburg-Clearwater, Fla. (-6,100 jobs, -12%); Nassau-Suffolk, N.Y. (-5,100 jobs, -8%); New Orleans-Metairie-Kenner, La. (-5,000 jobs, -16%) and Virginia Beach-Norfolk-Newport News, Va.-N.C. (-4,400 jobs, -12%). Springfield, Mass.-Conn. (-28%, -3,000 jobs) lost the highest percentage.

Other areas experiencing large percentage declines in construction employment included Anchorage, Alaska (-23%, -2,500 jobs); Detroit-Livonia-Dearborn, Mich. (-17%, -3,600 jobs) and Jackson, Miss. (-16%, -1,800 jobs).

Bakersfield-Delano, Calif., added the highest percentage of new construction jobs (23%, 3,200 jobs) followed by Yuba City, Calif. (18%, 300 jobs); El Centro, Calif. (15%, 200 jobs) and Pascagoula, Miss. (15%, 700 jobs). Los Angeles-Long Beach-Glendale, Calif. (7,700 jobs, 7%) added the most jobs.

Phoenix-Mesa-Glendale added 5,600 jobs, 7%.

Association officials cautioned that the growth in private sector construction activity taking place in some areas could be undermined by the threat of drastic tax increases next year. They urged Congress and the administration to work together to provide tax certainty while addressing chronic funding challenges for key infrastructure programs.

“Construction employment will suffer a significant blow if Washington gridlocks its way to another recession,” said the association’s chief executive officer, Stephen E. Sandherr. “Setting our fiscal house in order in a way that provides employers with predictable tax rates while allowing for needed infrastructure investments will boost employment in construction and many other sectors.”

Construction Materials

Construction Materials Prices Post Rare Year-Over-Year Dip In July

The cost of key construction materials dropped for the third consecutive month in July, pushing down year-over-year prices for the first time since 2009, according to an analysis of producer price index figures released today by the Associated General Contractors of America.

However, association officials warned that recent spikes in diesel fuel and steel prices may drive up the cost of construction again, and they urged lawmakers to invest in needed infrastructure projects promptly while prices remain low.

“This price decline may be the last, given the large jumps in diesel fuel and steel prices that have occurred or been announced since the Labor Department collected this producer price data in mid-July,” said Ken Simonson, the association’s chief economist. “If economic growth accelerates, we are likely to see an end to discounted prices for construction activity.”

The producer price index for inputs to construction — covering materials that go into every type of project, plus items consumed by contractors such as diesel fuel — decreased 0.7% in July and 0.6% from a year earlier, Simonson noted. The year-over-year decline was the first since November 2009, he added.

Simonson observed that falling prices for several key construction materials produced the latest monthly and year-to-year decreases. The price index for steel mill products tumbled 2.8% in July and 5.9% from a year ago. The index for diesel fuel fell 0.2% in July and 9.3% over 12 months.

The index for copper and brass mill shapes rose 0.5% for the month, but plunged 16% since July 2011. Aluminum mill products dropped in price by 1.3% over the month and 9.4% over 12 months.

A few materials posted substantial increases for the month and year, Simonson added. The index for gypsum products increased by 1.4% in June and 16% compared with June 2012, while the index for insulation materials climbed by 3.5% and 8.0%, respectively.

The price indexes for finished nonresidential buildings, which measure what contractors estimate they would charge to put up new structures, rose modestly both for the month and year-over-year, Simonson noted. The index for new industrial buildings posted a rise of 0.1% in July and 1.9% over 12 months.

The index for new office construction also rose 0.1% for the month and climbed 2.5% for the year. The index for new school construction was up 0.2% in July and 3.5% from a year ago. The price for new warehouse construction rose 0.5% for the month and 3.5% from June 2012.

Association officials called on Congressional leaders to complete action on long-delayed measures to invest in aging infrastructure like clean water systems. “Delaying infrastructure repairs will punish taxpayers and undermine economic growth,” said Stephen E. Sandherr, the association’s chief executive officer. “Putting off needed rehabilitation and replacement of worn-out structures will only force taxpayers to pay more for the same amount of work.”