Seasonally adjusted nonfarm payroll employment rose in 16 states and the District of Columbia and declined in 34 states between August and September, the Bureau of Labor Statistics (BLS) reported on Friday. Over the past 12 months, employment increased in 32 states plus D.C. and dropped in 18 states. The unemployment rate fell in September in 23 states plus D.C., climbed in 11 states and was unchanged in 16. Over the year, the rate improved in 29 states plus D.C., worsened in 16 states and remained steady in five. AGC's analysis of the data showed that construction employment increased for the month in 15 states plus D.C., shrank in 31 states and held level in Colorado, Idaho, New Mexico and Vermont. Over the year, construction employment rose in nine states plus D.C., slipped in 40 states and was unchanged in Alaska. The largest 12-month percentage gains in construction employment were in Oklahoma (10%, 6,500 jobs), Kansas (9%, 5,000 jobs) and New Hampshire (8%, 1,800 jobs). The steepest losses were in Nevada (19%, 14,200 jobs), Vermont (14%, 1,900 jobs) and Idaho (12%, 4,000 jobs). BLS does not compute state unemployment rates by industry. Data for D.C. and six states includes logging and mining with construction to avoid disclosure about industries with few firms.
New construction starts fell 7% in September, seasonally adjusted, McGraw-Hill Construction (MHC) reported on October 18, based on data it collected. Nonbuilding construction-public works and electric utilities-plunged 27% following "the strong activity reported over the summer. Meanwhile, both nonresidential building [up 8%] and housing [up 6%] were able to show some improvement in September after their loss of momentum in the preceding month."
Two new surveys point to an upturn in construction in the next year. The American Institute of Architects (AIA) reported on Wednesday that its Architecture Billings Index, a monthly survey that asks 700 architecture firms if their billings were higher or lower than the month before, rose from 48.2 in August to 50.4 in September, the first time it was above the breakeven 50 level since January 2008. Among the four practice specialty subindexes, commercial / industrial topped 50 for the fifth straight month, at 56.3; institutional, 47.9; multi-family residential, 47.0; and mixed practice, 44.2.
A quarterly survey of 73 corporate economists released today by the National Association for Business Economics (NABE) "‘confirms that the U.S. recovery from the Great Recession continues, with business conditions improving,' said [survey committee chair] William Strauss [of the] Federal Reserve Bank of Chicago. ‘Industry demand, profits, costs, employment and capital spending strengthened compared to results in the July 2010 survey.'" Of the 50 respondents to a question about plans for spending on structures, 12 said they expect their firms to increase spending over the next 12 months, while 11 expect a decrease-the first net positive response to the question in over two years.
The NABE survey found slightly more firms reported rising materials costs than in the second quarter 33% vs. 30%), while only 2% reported falling costs, down from 10% in the previous survey. In contrast, more firms lowered selling prices (17%) than raised them (14%). United Technologies Corp. "finance chief Gregory Hayes said Wednesday that higher prices for copper, oil and other commodities [remain difficult to pass along] ‘in several of our markets,'" the Wall Street Journal reported on Thursday. "Its Otis elevator unit in North America hasn't been able to raise prices, he said, and at its Carrier heating and air conditioning business ‘pricing is always an issue.'"
Industrial production (IP) in manufacturing slipped 0.2% in September, seasonally adjusted, after rising 0.1% in August and 0.6% in July, the Federal Reserve reported on October 18. IP of construction supplies sank 0.8%, following a 1.1% gain in August and a drop of 0.6% in July. Capacity utilization in manufacturing has remained little changed for five months at around 72% of capacity, compared with a long-term average of 79%. Demand for factory construction is not likely to recover until IP shows sustained increases and capacity utilization exceeds the long-term average. An exception was Intel Corp., which announced on Tuesday that it "will invest between $6 billion and $8 billion on future generations of manufacturing technology in its American facilities. The action will fund deployment of Intel's next-generation 22-nanometer (nm) manufacturing process across several existing U.S. factories, along with construction of a new development fabrication plant (commonly called a ‘fab') in Oregon. The projects will support 6,000 to 8,000 construction jobs and result in 800 to 1,000 new permanent high-tech jobs."
On Tuesday, BLS reported on first-quarter employment and average weekly wage by industry in the 10 largest counties. For construction, U.S. employment in March totaled 5.2 million, down 12% from a year earlier, and weekly wages averaged $894 in the first quarter, down 1.3% from a year before. Both declines were steeper than for the other 10 sectors shown. In most of the 10 largest counties (listed in descending order of population) had even larger construction decreases: Los Angeles County, -16% for employment -0.5% for wages; Cook (Chicago and suburbs), -16% and -1.1%; New York (Manhattan only), -13% and 3.7%; Harris (Houston), -10% and -1.1%; Maricopa (Phoenix and suburbs), -21% and -1.8%; Dallas, -13% and 1.0%; Orange, California, -15% and -3.3%; San Diego County, -14% and 0.6%; King (Seattle and suburbs), -19% and -1.8%; and Miami-Dade, -17% and -2.7%.
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