Seasonally adjusted nonfarm payroll employment rose in 41 states and the District of Columbia in October, fell in six states and was unchanged in North Carolina, South Dakota and Wyoming, the Bureau of Labor Statistics (BLS) reported on Tuesday. Employment rose from a year earlier in 36 states plus D.C. and fell in 14 states. The unemployment rate, which was unchanged nationally at 9.6%, fell in 19 states plus D.C., rose in 14 states and was flat in 17. Construction employment exceeded September levels in 29 states, dropped in 20 plus D.C. and remained the same in Rhode Island. National construction employment rose 5,000 in October after sinking 8,000 in September. Similarly, most states with gains in October had lost construction jobs the month before, indicating that the industry is no longer in free fall but remains in flux. Compared with October 2009, construction employment rose in 11 states plus D.C.—the largest number of 12-month gains in two years—and fell in 39 states. Only five states had double-digit percentage declines over 12 months: Nevada, -19%, -14,500 jobs; Idaho, -15%, -5,000 jobs; Vermont, -13%, -1,800 jobs; Montana, -11%, -2,500 jobs; and Missouri, -10%, -11,900 jobs. The largest 12-month percentage gains in construction jobs were in Kansas, 9%, 5,100 jobs; Oklahoma, 8%, 5,400 jobs; Arkansas, 5%, 2,600 jobs; D.C. 5%, 500 jobs; and West Virginia, 3%, 1,100 jobs. BLS combines mining and logging with construction in D.C. and six states to prevent disclosure of data for industries with few employers.“The value of new construction starts edged up 2% in October” but was down 3% year-to-date from January-October 2009 levels, McGraw-Hill Construction (MHC) reported on Friday, based on data it collected. Among MHC’s three categories, nonbuilding construction jumped 14% for the month but slipped 2% year-to-date; residential building rose 3% and 8%, respectively; and nonresidential building slumped -9% and -12%. “This year’s pattern shows activity fluctuating within a set range, consistent with the belief that construction starts have now stabilized at a low level,” commented MHC vice president of economic affairs Robert Murray. “At the same time, there’s yet to be evidence that renewed expansion on a sustained basis is about to take hold. The emerging recovery for housing has proven to be halting, and commercial building is still in the process of bottoming out. While public works in 2010 has moved at a decent clip, its prospects for 2011 are less favorable, given fading stimulus support and the fact that Congress has yet to pass the appropriations bills for fiscal 2011.”In a third sign of gradual improving conditions in construction, BLS reported on Tuesday that mass layoff events (involving 50 or more workers from a single employer) in construction fell 15% from October 2009 to October 2010 and involved 12% fewer workers. Mass layoffs of highway, street and bridge construction workers, which set an October record in 2009, fell by one-third, probably reflecting the high level of federal stimulus-funded highway projects this year.Industrial production (IP) in manufacturing rose 0.5% in October, seasonally adjusted, and 6.1% from October 2009, the Federal Reserve reported on November 16. IP of construction supplies inched up 0.2% in October and 7.7% over 12 months. Capacity utilization in manufacturing rose to 72.7% of capacity, the highest rate since August 2008 but still far below the 1972-2009 average of 79.2%. Together, above-average capacity utilization and growing current IP can indicate demand for factory construction.Lodging Econometrics, which tracks hotel construction activity, announced on November 8 that the “Construction Pipeline” totals of projects under construction, expected to start in the next 12 months or in early planning stages, were “at their lowest level since Q3 [the third quarter of] 2005, however the rate of decline has recently moderated. Under Construction totals, at 487 projects/62,041 rooms, represent just 15% of projects and 16% of rooms, and are the lowest since the 1990s. Totals for projects Scheduled to Start Construction in the Next 12 Months, at 1,218 projects/129,356 rooms, have also continued to decline and are at a low not seen since Q4 2004….For the foreseeable future, the total Construction Pipeline is expected to continue trending downward, albeit at a slower pace.”Real (net of inflation) gross domestic product (GDP)—defined as the output of goods and services produced by labor and property located in the United States—rose 2.5% in the third quarter at a seasonally adjusted annual rate, not 2.0% as in the “advance” estimate, the Bureau of Economic Analysis reported on Tuesday. However, real gross private investment in nonresidential structures fell 5.7% rather than rising 3.9% as first estimated. Real residential investment plunged 27.5%, not 29.1%. Real gross government investment in structures climbed 13.3%. The GDP price index increased 2.3%. The price index for private nonresidential structures rose 2.5%; the residential price index fell 0.4%; and the government index edged up 1.7%.“Real GDP declined in 38 states in 2009, led by national downturns in durable-goods manufacturing and construction,” BEA reported on Thursday. “One of these two industries was the leading contributor to the decline in 34 states….The decline in construction subtracted more than one percentage point from growth in Nevada, Arizona and Idaho, and nearly subtracted a point in Florida.” Nationally, construction accounted for 0.44 percentage points of the 2.1% decline in state GDP. Construction added to state GDP in only five states: North Dakota, 0.39 points out of 3.9% growth; Louisiana, 0.18 out of 2.5%; Alaska, 0.12 out of 3.5%; South Dakota, 0.06 out of 2.2%; and Nebraska, 0.05 out of 0.3%.

Materials prices, which had been well behaved for nearly two years, have started to act up—with emphasis on UP.

Construction employment expanded in 29 states between September and October, while fewer people are working in construction compared to last year in 39 states, AGC reported in an analysis of state employment data released Tuesday by the Labor Department.  

Construction contractors continue to be squeezed by rising prices for key construction materials and flat prices for what they can charge for finished projects, according to an analysis of October Producer Price Index figures released Tuesday by the Associated General Contractors of America.

RISING MATERIALS PRICES, FLAT PRICES FOR FINISHED PROJECTS SQUEEZING HARD-HIT CONSTRUCTION INDUSTRY, ECONOMIST NOTES

Construction contractors continue to be squeezed between rising materials costs and falling output prices, according to AGC's new analysis of materials costs. AGC noted that even as the producer price index leapt in April for key construction components, the amount contractors charge for construction services remains depressed.

Increases in public-sector construction spending, driven by stimulus funds, helped boost total construction activity by almost $2 billion between February and March, according to AGC's analysis of federal spending figures released Monday.

AGC connected the Wall Street Journal with chief economist Ken Simonson to comment for a story about how one company has begun all-too-rare construction of a corporate headquarters to take advantage of low construction costs.

Construction employment expanded in 26 states and the District of Columbia between February and March 2010, yet only Arkansas and North Dakota have more construction workers than they did a year ago, according to AGC's analysis of federal employment figures released Friday.

Construction spending tumbled in February by $11.6 billion, or 1.3 percent, to $846 billion, a low last recorded in 2002, according to AGC's analysis of new federal figures. Declines occurred relative to both the month before and February 2009 in most categories of private residential and nonresidential construction, as well as public construction, AGC's chief economist Ken Simonson noted.