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AGC's Data DIGest: April 12-18, 2016

44 states, D.C. add jobs in March; Beige Book finds construction stays mostly positive

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Seasonally adjusted construction employment rose in 44 states and the District of Columbia from March 2015 to March 2016, decrease in five states and was unchanged in Connecticut, an AGC analysis of Bureau of Labor Statistics (BLS) data released on Friday showed. California again added the most jobs (39,600 jobs, 5.6%), followed by Florida (27,500 jobs, 6.5%), New York (17,300 jobs, 4.9%) and Massachusetts (16,000 jobs, 11.9%). Hawaii again added the highest percentage of construction jobs during the past year (20.9%, 7,000 jobs), followed by Rhode Island (13.3%, 2,200 jobs), Massachusetts and Nevada (11.6%, 7,500 jobs). North Dakota again lost the highest percentage and total number of construction jobs (-15.7%, -5,700 jobs) for the year. Other states that lost jobs for the year include Alaska (-8.7%, -1,600 jobs), Wyoming (-7.1%, -1,700 jobs), Kansas (-5.6%, -3,400 jobs) and West Virginia (-1.2%, -400 jobs). States with the steepest declines have been hurt by the pullback in oil and gas drilling, coal mining and farm income. From February to March, seasonally adjusted construction employment increased in 28 states, shrank in 22 states, and held steady in D.C. (AGC's rankings are based on seasonally adjusted data, which is available only for construction, mining and logging combined in D.C., Hawaii and five other states.)

"Reports from the 12 Federal Reserve districts suggest that national economic activity continued to expand in late February and March, though the pace of growth varied across districts," the Fed reported on Wednesday in the latest "Beige Book," a summary of informal soundings of businesses in each district conducted from early February to April 7. The districts are referred to by the name of their headquarters cities. "Contacts reported difficulty finding...construction workers (Cleveland, Richmond, Atlanta and San Francisco)...Capital spending increased on balance in most districts, with scattered reports of spending for capacity expansion....District reports mentioned a variety of other sectors where capital investment had expanded [including] construction and finance (Cleveland)...[Manufacturing] showed "solid gains in construction materials (Philadelphia, Cleveland and Chicago)...Chicago and Minneapolis not[ed] softer demand for agricultural and mining machinery than for construction machinery....Construction and real estate activity generally expanded in late February and March, and contacts across districts maintained a positive outlook for the rest of the year....Multifamily construction remained strong in most districts. Chicago, Cleveland and St. Louis also noted some improvement in demand for single-family home construction, and a contact in San Francisco reported backlogs of more than six months for new single-family units....Most districts reporting on nonresidential construction said that demand increased. Contacts in Boston said the education, health care, hospitality, retail and office sectors all contributed to its recent construction boom. Nonresidential contractors in Cleveland cited broad-based demand, with particular strength in education and healthcare projects, where several builders expressed concern about their capacity to take on additional projects. In contrast, Chicago noted continued weak demand for industrial construction, and Philadelphia reported fewer starts of new nonresidential projects....Residential construction contacts in the Philadelphia and Cleveland districts reported that low energy prices have significantly reduced costs for petroleum-based materials such as shingles....Contacts in the Boston, Cleveland and St. Louis districts cited sizeable wage increases for workers in fields such as information technology services and skilled construction...trades."

The producer price index (PPI) for final demand in March, not seasonally adjusted, increased 0.2% from February but slipped 0.1% year-over-year (y/y) from March 2015, the Bureau of Labor Statistics (BLS) reported on Wednesday. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, increased 0.1% for the month and 1.1% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—also rose 1.1% y/y. Changes ranged from 0 y/y for healthcare construction to 1.0% for industrial and office buildings, 1.3% for warehouses and 1.6% for schools. PPIs for new, repair and maintenance work on nonresidential buildings fell 2.2% y/y for plumbing contractors and rose 1.4% for roofing contractors, 3.6% for concrete contractors and 5.0% for electrical contractors. The index for inputs to construction—excluding capital investment, labor and imports—comprises a mix of 59% goods (including 5% for energy) and 41% services (including trade services, 26%; transportation and warehousing, 4%; and other services, 10%). The overall PPI for inputs to construction rose 0.3% for the month but fell 1.9% y/y. The PPI for all goods used in construction climbed 0.9% for the month but decreased 3.4% y/y, as the sub-index for energy jumped 9.4% for the month but plunged 27% y/y, while goods less food and energy edged up 0.1% for the month but fell 0.6% y/y. The index for services rose 0.7% and 0.5%, respectively. PPIs for inputs to seven categories of new nonresidential structures all increased for the month but declined y/y, with y/y decreases ranging from 1.8% for educational and vocational structures to 5.7% for power and communications structures. PPIs for inputs to new single- and multifamily construction posted y/y declines of 1.0% and 1.1%, respectively. Materials important to construction that had notable one- or 12-month price changes include diesel, up 4.0% for the month but down 39% y/y; steel mill products, 0.4% and -16%, respectively; copper and brass mill shapes, 4.1% and -11%; aluminum mill shapes, 0.3% and -11%; cement, 0.7% and 5.1%; and flat glass, -0.2% and 5.8%.

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