Job losses shrink but not in construction; stimulus news is mixed; factory orders rise

Nonfarm payroll employment fell in July by 247,000, seasonally adjusted, about half the monthly rate over the 12 months since July 2008, when jobs losses totaled 5,740,000, the Bureau of Labor Statistics (BLS) reported on Friday. In contrast, construction employment fell by 76,000, only slightly less than the 12-month average loss of 88,000 per month. Construction accounted for 30% of the losses in June and 18% of the losses in the 12-month span, although the industry's 6,148,000 jobs in June 2009 accounted for less than 5% of the nonfarm total. The rate of job loss in residential construction (residential building and specialty trade contractors) slowed slightly (to 1.1% in July, vs. 16.4% over 12 months) but nonresidential (building, specialty trades and heavy and civil engineering) construction losses accelerated (1.3% in July, 13.5% over 12 months). In a bad sign for future demand for construction, employment in architectural and engineering services slumped 1.0% for the month and 8.7% over 12 months. The unemployment rate overall was 9.7%, not seasonally adjusted (9.4%, seasonally adjusted), and 18.2% for construction, the highest of any industry. (Industry rates are not reported on a seasonally adjusted basis.) Average hourly earnings in construction rose 4 cents for the month to $22.68, up 3.8% from a year earlier, compared to a 2.5% annual increase for all private production or nonsupervisory workers.  "Johnson Controls [Inc.] has been awarded about $25 million in government contracts under the American Recovery and Reinvestment Act's stimulus package, which makes allocations to improve energy efficiency," the Wall Street Journal reported on Wednesday. "Honeywell International Inc. also recently received orders from the U.S. Army Corps of Engineers to make federal facilities more energy efficient. The pact could bring in as much as $650 million over three years....Despite the potential benefits of government awards, it hasn't been smooth sailing....Bruce McDonald, chief financial officer at Johnson Controls, said on a recent conference call that the company is 'still seeing temporary contracting delays as the funding guidelines aren't clear.'" "President Barack Obama's stimulus spending has run into a problem: A shortage of General Electric Co. water filters," Bloomberg News reported on Thursday. "GE makes them in Canada. Under the program's 'Buy American' rules, that means the filters can't be used for work paid for by the $787 billion fund. Contractors are searching the U.S. in vain for filters as well as bolts and manhole covers needed to build wastewater plants, sewers and water pipes financed by the economic stimulus. As officials wait for federal waivers to buy those goods outside the U.S., water projects from Maine to Kansas have been delayed....the Environmental Protection Agency, which administers the water funding, has granted six waivers and has 29 petitions pending....The rules affect water projects most because highways and bridges have been constructed under Buy American regulations for the past 30 years, and not much stimulus money has been spent so far on public housing and schools, said Chris Braddock, the U.S. Chamber of Commerce's associate director for procurement."  "Gun-shy [school] administrators might undermine a federal stimulus program that encourages school construction by helping districts pay down debt," the (Wisconsin) Daily Reporter reported on Monday. "Some district leaders say they gladly are accepting a piece of $125 million in no-interest bonds but are reluctant to invest the savings in new projects. 'The climate out there is terrible and with the cuts made in the state budget, it's just really difficult right now,' said John Whalen, president of the Sun Prairie Area School District Board of Education. 'I don't anticipate this will encourage us to do more projects,' he added. The district received $23 million in federal bonding, more than any other district in the state, though the bonding did not encourage additional construction. Sun Prairie used it to help pay off the $30 million it put on taxpayers for construction of a new high school and conversion of the old high school into a middle school. Both schools are scheduled to open in fall 2010. While Sun Prairie stands pat, other districts might jump at the opportunity. The School District of La Crosse received $6.6 million in bonds to help pay off debt from $18.5 million in expansion, renovation and upgrade projects." New orders from U.S. manufacturing plants (except semiconductor manufacturing) increased 0.4% in June, seasonally adjusted, the Census Bureau reported on Wednesday. Nevertheless, year-to-date (YTD) orders for the first half of 2009 were 23% below the total for the first six months of 2008. Orders for construction materials and supplies climbed 1.4% for the month but fell 17% YTD. Orders for construction machinery rose 11% for the month but tumbled 69% YTD. Census posted preliminary results from the 2007 Census of Construction on August 4. "These reports include such statistics as number of establishments, employment, payroll, value added by construction, cost of materials, value of construction work, value of business done and capital expenditures," the posting noted. "The industry reports also include selected statistics for states. While most of the state data in the industry series reports are by physical location of the establishment, some data are available by reported location of the construction work. The data in industry reports are preliminary and subject to change in the following reports." For instance, one table shows the value of construction performed by highway, street and bridge contractors in 2007 totaled $102 billion, ranging from $254 million in the District of Columbia to $10.8 billion in California.