New construction starts in May climbed 3% from the previous month, McGraw-Hill Construction (MHC) reported on Tuesday, based on data it collected. "Nonresidential building showed improvement after weak activity in April, and residential building edged upward. However, nonbuilding construction retreated in May, following April's elevated amount of new public works and electric utility projects. For the first five months of 2010, total construction starts on an unadjusted basis [was] down 2% from the same period a year ago....'The recent pattern of construction starts indicates that activity has stabilized at a low level, with ups-and-downs on a monthly basis, but the transition to sustained expansion has yet to occur,' stated Robert A. Murray, vice president of economic affairs for [MHC]. 'The volume of nonresidential building remains quite low, and is likely to stay that way through 2010. Much of this year's upward movement is expected to come from public works construction, which lost momentum in May after earlier gains.'...The 2% decline for total construction starts on an unadjusted basis during the first five months of 2010 was the result of varied behavior by sector. Residential building climbed 30%, with the comparison to the early months of 2009 when the improvement for single-family housing was just beginning to take hold. Nonbuilding construction year-to-date decreased 8%, with public works down 4% while electric utilities fell 28%. Nonresidential building year-to-date dropped 16%, due to this performance by major segment: commercial building, down 32%; manufacturing building, down 63%; and institutional building, down 4%."
The Architecture Billings Index (ABI), a measure of the difference between the number of architecture firms reporting increased billings less those with decreased billings compared to the month before, slipped to 45.8 in May from 48.4 in April, the American Institute of Architects said on Wednesday. The May reading was the 28th straight below the breakeven 50 level and broke a string of three increases. Sub-indexes by practice specialty, which are reported as three-month moving averages, rose to 51.3 from 49.6 for commercial/industrial practices and to 46.9 from 45.7 for residential, but slipped from 47.3 to 46.8 for mixed and from 45.0 to 43.4 for institutional. ABI readings below 50 suggest there will be fewer building projects for contractors to bid on and build in future months.
Seasonally adjusted nonfarm payroll employment increased in May in 41 states and the District of Columbia, decreased in five states, and was unchanged in four, the Bureau of Labor Statistics (BLS) reported on June 18 (with revisions posted on June 24). But, compared to May 2009, employment decreased in 39 states and increased in 11 states plus D.C. Construction employment decreased for the month in 25 states, improved in 22 plus D.C., and was unchanged in three states. Over 12 months, construction employment increased in five states, the largest 12-month tally since December 2008: Kansas (6.2%, 3,600 jobs); North Dakota (5.4%, 1,100 jobs); Arkansas (3.0%, 1,500 jobs); Alaska (2.5%, 400 jobs); and New Hampshire (1.3%, 300 jobs). There were year-over-year construction job losses in 45 states plus D.C. The largest percentage losses were in Nevada (-23.0%, 18,900 jobs); Washington (-15.6%, 25,400 jobs); Missouri (-15.0%, 18,000 jobs); and Vermont (-14.7%, 2,000 jobs). (BLS combines mining and logging with construction in seven states plus DC to prevent disclosure of data about industries with few employers.)
The number of mass layoff events (involving 50 or more workers from a single employer) and workers affected (as measured by new unemployment claims from those events) dropped by more than 50% from May 2009 to May 2010, BLS reported on Thursday. The number of construction events and workers affected both dropped 38%.
Construction union wage and benefit settlements "so far in 2010 have resulted in an average first-year increase of $0.55 or 1.1%...down considerably" from $1.49 or 3.1% in the comparable period of 2009, the Construction Research Labor Council reported on Monday. "Second- and third-year settlements are also lower, but by lesser amounts. Small or no increases were widespread. Almost a quarter of new agreements were freezes or reductions and about two-thirds were less than 2%....Almost all second- and third-year increases were under 3%....As has historically been the case, low average settlement level has been accompanied by shorter agreements. A majority of agreements have been for one year."
Personal income increased 0.9% nationally in the first quarter at a seasonally adjusted annual rate, with increases in all but two states (-2.0% in North Dakota, 0 in South Dakota), the Bureau of Economic Analysis reported on June 18. The largest percentage increases were in Mississippi, 1.6%; Kansas, 1.5%; Louisiana, Alaska, Tennessee and Hawaii, 1.4% each. Earnings (payrolls, supplements to wages and salaries, and proprietors' income) rose 0.64%, but construction earnings fell overall and in 39 states plus D.C. Construction earnings rose in nine states and stayed level in two.
Census released estimates on Tuesday for population change between July 2008 and July 2009 for all cities with more than 100,000 persons. Rapidly increasing population can imply construction opportunities but may also result from annexing adjoining land. The largest percentage increases were in Frisco, Texas, 6.2%; Cary, North Carolina, 5.7%; McKinney, Tex., 5.5%; New Orleans, 5.4%; and Alexandria, Virginia, 3.8%. The largest numerical increases were in New York City, 45,087 (0.5%); Los Angeles, 30,294 (0.8%); San Antonio, 24,394 (1.8%); Phoenix 23,775 (1.5%); and Fort Worth, 23,276 (3.3%).
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