House and Senate Democratic leaders announced agreement this evening on the
fiscal stimulus legislation and intend to push for passage this weekend. "Although the final legislative language was not immediately available, lawmakers said the bill contained more than $150 billion in
public works projects for transportation, energy and technology," the
New York Times reported online, out of $507 billion of spending and $282 billion in tax relief, for a total of $789 billion. "Late Wednesday night, negotiators were pushing to add $6.6 billion more to satisfy White House and House Democratic demands for more
school construction funds," the
Wall Street Journal reported online. The construction total apparently remained at a high level even though the overall total is less than in the House bill ($819 billion) or the Senate version ($838 billion). AGC will post updates on tax and spending provisions affecting construction at
www.agc.org/stimulus.
"The deepening recession and ongoing credit crunch continue to drag down
builder confidence in the multifamily housing market, according to the latest results of the Multifamily Rental Market Index (MRMI) and Multifamily Condo Market Index (MCMI)," the National Association of Home Builders (NAHB) reported today. "The component of the MRMI that gauges supply conditions sank dramatically in the fourth quarter of 2008, down to 22 [from 45 a year before] for affordable apartments and 19 [from 40] for market-rate apartments...On condo side, the supply component fell 11 points from the fourth quarter of 2007, to hit a new record low of 8. NAHB's Multifamily Market Indexes are derived from quarterly surveys of multifamily builders and developers in which they rank their perceptions of the current conditions and expectations for the near future as ‘good,' ‘fair,' or ‘poor.' Responses are used to create a scale of 0 to 100, with a rating of 50 generally indicating that number of positive responses is about the same as the number of negative responses. Looking ahead six months, builders and developers are only slightly less pessimistic: The MRMI component tracking builder expectations for the supply of affordable rentals stood at 29, down from 49...Market-rate rentals [fell to 22.5 from 50]. On the MCMI, the index gauging expectations for condo supply stood at 13, down from 29... On the demand side, the components of the MRMI tracking current conditions for [Class A apartments] declined to 23.5 [from 43,] for moderately priced apartments...to 37 [from 49] and affordable [apartments to 42 from 58]. Other indicators also remain weak: Traffic among potential renters and condo buyers is down, vacancy rates for apartments [are] higher than at the same time a year ago, and asking rents are [at] the lowest level recorded since the inception of the series in 2003."
Nonfarm
payroll employment plummeted by 598,000 in January, seasonally adjusted, and 3.5 million (2.5%) over the past 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. The
unemployment rate climbed to 8.5%, not seasonally adjusted (7.6%, seasonally adjusted) from 5.4% a year earlier. Job losses in construction totaled 111,000 for the month, seasonally adjusted, and 747,000 (10%) over 12 months, or more than one-fifth of all job losses, even though construction accounts for only one out of20 employees. The unemployment rate among construction workers in January was 18.2%, not seasonally adjusted (seasonal adjustment is not available by industry), up from 11% in January 2007.
Average hourly earnings for production or nonsupervisory workers in construction amounted to $22.41 in January, seasonally adjusted, an increase of 4.8% ($1.03) from January 2007, compared to a 3.9% increase in the total private sector. The larger increase in construction is probably attributable to: larger job losses in lower-paid residential building and specialty trades (12% over the year) than in higher-paid nonresidential building, specialty trades and heavy and civil engineering construction (7%); union wage settlements of 4.5-5%; and continuing demand for highly skilled and relatively scarce crane and heavy-equipment operators.
Only 72 out of 310 metro areas for which nonfarm payroll employment data were available in December had increases from one year earlier, whereas 234 had losses and four were unchanged, BLS reported on February 4. Sustained employment gains are an indicator of construction opportunities. The largest percentage increases were in McAllen-Edinburg-Mission, Texas, 3.8%; Grand Junction, Colorado, 3.4%; Laredo, 3.1%; and College Station-Bryan, Texas, 2.6%.
Orders for U.S. manufactured goods (excluding semiconductor manufacturing) declined for the fifth straight month in December, by 3.9% seasonally adjusted, but rose 2.0% for the year as a whole compared to 2007, the Census Bureau reported on Thursday. Orders for construction materials and supplies shrank 3.5% for the month and 3.7% for the year. Shipments totaled $520 billion for the year (10% of all U.S. manufacturing shipments, including semiconductor manufacturing). Orders for construction machinery plunged 28% in December but rose 13% for the year. Shipments totaled $29 billion (6% of all manufacturing and 8% of all machinery shipments).
"Nearly 300 state-funded public works projects will go forward through Friday, but they could be stopped cold if state leaders cannot find a solution to California's budget crisis by the end of the week," the San Francisco Chronicle reported on Tuesday. "The Pooled Money Investment Board that controls financing for such jobs already has stopped funding 5,600 projects as a result of the state's cash crunch, allowing the remaining 276 projects to continue."
