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AGC's Data DIGest: April 17-23, 2015

Construction jobs increase in 41 states in March; Dodge starts, ABI show mixed trends

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Seasonally adjusted construction employment rose in 41 states, declined in nine and remained level in the District of Columbia from March 2014 to March 2015, an AGC analysis of Bureau of Labor Statistics (BLS) data released on Tuesday showed. California added more new construction jobs (46,300 jobs, 6.9%), followed by Texas (39,300, 6.2%) and Florida (37,400, 9.7%). Idaho added the highest percentage of new construction jobs (14.8%, 4,800), followed by North Dakota (12.1%, 4,000) and Washington (12.1%, 18,900). West Virginia (-2,400, -7.2%) and Mississippi (-2,400, -4.7%) were tied for the most construction jobs lost and also experienced the steepest percentage losses, followed by Indiana (-1,900, -1.6%). For the month, construction employment rose in only 19 states, declined in 29 plus D.C. and was flat in Maine and Montana. (BLS combines mining and logging with construction in D.C. and six states to avoid disclosing data about industries with few employers.)

New construction starts retreated 13% from February to March at a seasonally adjusted annual rate, following "strong gains in January (up 9%) and February (up 17%), when construction was lifted by the start of several massive projects valued each in excess of $1 billion," Dodge Data & Analytics (formerly McGraw Hill Construction) reported on Tuesday, based on data it collected. "By major sector, March showed diminished activity for nonresidential building and nonbuilding construction, while residential building held steady. For the first three months of 2015, total construction starts on an unadjusted basis were up 28% from the same period a year ago. If projects in excess of $1 billion are excluded, the result for total construction starts would be a 4% gain in March on a seasonally adjusted basis relative to February, and an 11% gain for the first three months of 2015 on an unadjusted basis relative to the same period a year ago." Chief Economist Robert Murray commented, "the March pullback returns activity to a more sustainable pace, at the same time showing an industry that's still in the midst of expansion. While nonresidential building lost some momentum in March, the broad pattern over recent months reveals more growth for commercial building combined with strengthening for several institutional structure types, most notably school construction. Although there's concern that public works construction will be dampened by the uncertainty caused by the soon-to-expire federal transportation legislation, a healthy amount of highway and bridge work has reached the construction start stage so far in 2015. And, while residential building still awaits renewed upward progress by single-family housing, the multifamily side of the housing market continues to strengthen, as low vacancies and rising rents in numerous markets provide the justification for more construction."

The Architecture Billings Index (ABI), which measures whether architecture firms' billings rose or fell from the prior month (any score over 50 denotes more firms reported growth than decline) increased to 51.7 in March from 50.4 in February, the American Institute of Architects (AIA) reported on Wednesday. AIA Chief Economist Kermit Baker noted, "The multifamily residential market has seen its first occurrence of back-to-back negative months [49.7 in March, 49.6 in February] for the first time since 2011, while the institutional [53.2 and 52.4] and commercial [53.0 and 51.2] sectors are both on solid footing."

"Now, large companies are moving back into the city in an attempt to attract and retain workers—particularly younger workers who are postponing homeownership and favor renting in walkable neighborhoods," the Wall Street Journal reported on Wednesday. The article cites recent or announced moves by Expedia Inc. from Bellevue, Wash. to Seattle; Motorola Mobility LLC and Archer Daniels Midland Co. to downtown Chicago; and Autodesk Inc. from Waltham, Mass. to Boston. The trend has significant implications for residential, retail and municipal construction as well as office construction. "What happens to the suburban spaces vacated when companies relocate? 'Communities are turning them into everything from health clinics to city halls to community colleges,' [said Ed McMahon, senior resident fellow for the Urban Land Institute.] 'One of the biggest trends of the next generation is going to be the repurposing of an incredible amount of existing suburban development.'"

Hotel construction remains hot, particularly at airports. The Journal reported on April 15 on airport hotel projects "taking shape" in airports serving San Francisco, Atlanta, Denver, Minneapolis-St. Paul and potentially John F. Kennedy Airport in New York. The Census Bureau reported in its monthly construction spending report on April 1 that private lodging increased 9.3% in the first two months of 2015 combined from the same period last year, after rising 19% from 2013 as a whole to 2014. "According to STR, parent company of Hotel News Now, 128,874 U.S. hotel rooms were under construction in February 2015, a 31.9% increase over February 2014," the publication reported on April 3.

The Census Bureau today released the 2013 update of County Business Patterns, which provides a wealth of data about broad sectors (such as construction) and detailed industries (such as highway, street and bridge construction or masonry contractors) for the U.S., states, counties, metropolitan and "micropolitan" areas. Data includes the number of establishments, employment during the week of March 12, and first-quarter and annual payroll. The data is useful for studying the economic activity of small areas; analyzing economic changes over time; and comparing different geographic areas or industries. Census also updated its Industry Snapshots, which include a U.S. map that ranks states and D.C. by quartiles for 2012 value of business done (total, per employee and per capita), number of establishments and employees, and population, along with tables and charts for each state showing 1997, 2002, 2007 and 2012 data for these indicators overall or for specific sectors.

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