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AGC's Data DIGest: Dec. 18, 2017-Jan. 2, 2018

Construction employment rises in 40 states in November; starts slump, Dodge says

Editor’s note: Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Seasonally adjusted construction employment rose in 40 states year-over-year (y/y) from November 2016 to November 2017, declined in 10 states and held steady in the District of Columbia, an AGC analysis of Bureau of Labor Statistics (BLS) data released on December 22 showed. The largest percentage gains again were in Nevada (14%, 10,900 jobs) and Rhode Island (13%, 2,400), followed by New Hampshire (10.0%, 2,600) and Oregon (9.7%, 9,100). The most jobs again were added in California (48,400, 6.2%), Florida (41,800, 8.7%) and Texas (23,900, 3.4%). The steepest percentage losses again occurred in Iowa (-7.5%, -6,100 jobs), Missouri (-5.3%, -6,500) and North Dakota (-4.8%, -1,600). Missouri and Iowa again lost the most construction jobs, followed by North Carolina (-3,100, -1.5%). For the month, employment rose in 39 states, fell in 11, and was flat in D.C. Texas added the most jobs for the month (8,200, 1.1%), followed by Florida (6,200, 1.4%), New York (5,300, 1.4%) and Indiana (4,900, 3.6%). Alaska had the largest percentage gain for the month (4.5%, 700), followed by Indiana. Maryland lost the most jobs for the month (-1,900, -1.1%); Vermont had the highest percentage loss (-3.2%, -500). Construction employment reached record highs in Massachusetts and Texas. (AGC's rankings are based on seasonally adjusted data, which in D.C., Maryland and five other states is available only for construction, mining and logging combined.)

The value of new construction starts in November decreased 12% from October at a seasonally adjusted annual rate, following a 9% drop the month before, Dodge Data & Analytics reported on December 21. "Nonresidential building fell 14% in November, retreating for the second month in a row after the sharp improvement reported in late summer. The nonbuilding construction sector, which can be volatile on a month-to-month basis, plunged 32% in November after its 28% hike in October, which included the start of two large natural gas pipeline projects. Meanwhile, residential building managed to edge up 1% in November, as an improved amount for single-family housing slightly outweighed a moderate pullback for multifamily housing. During the first 11 months of 2017, total construction starts on an unadjusted basis were...up 1% from a year ago. The year-to-date [YTD] increase for total construction was restrained by a 39% downturn for the electric utility/gas plant category. Excluding electric utilities and gas plants, total construction starts [YTD] would be up 4%'."

Housing starts in November rose 3.3% at a seasonally adjusted annual rate from the October rate and 13% from the November 2016 rate, the Census Bureau reported on December 19. YTD starts for the first 11 months of 2017 combined rose 3.1% from the same months of 2016. Single-family starts climbed 5.3% for the month, 13% y/y and 8.7% YTD. Multifamily starts (in buildings with five or more units) edged up 0.8% for the month and 11% y/y but skidded 8.5% YTD. Building permits, a fairly reliable indicator of near-term starts, decreased 1.4% for the month but increased 3.4% y/y and 5.6% YTD. Single-family permits increased 1.4% for the month, 9.7% y/y and 10% YTD. Multifamily permits slumped 8.8% for the month, 7.7% y/y and 2.2% YTD.

The Architecture Billings Index (ABI) rose to an 11-month high of 55.0 in November, seasonally adjusted, up from 51.7 in October, the American Institute of Architects (AIA) reported on December 20. The index measures the percentage of surveyed architecture firms that reported higher billings than a month earlier, less the percentage reporting lower billings; any score above 50 indicates an increase in billings.AIA says the index "provides an approximately 9-to-12 month glimpse into the future of nonresidential construction spending activity." Scores (based on three-month moving averages) for the four practice specialties increased from October, with similar positive readings: residential (mainly multifamily), 53.9 (vs. 52.4 in October); mixed practice, 53.6 (vs. 51.3); commercial/industrial, 53.3 (vs. 52.4); and institutional, 52.4 (vs. 51.9). On December 22, AIA reported, "Of the almost three-quarters of firms that have looked to add or replace architectural positions recently, over half indicate that it has been extremelydifficult to fill some or all of these positions. An additional 37% indicate that it has been somewhat difficult to fill some or all of their positions. As a result, firms were asked what actions they have taken to deal with staffing issues, or would implement if the need arose. At the top of the list was 'increase salary offerings above typical levels to attract applicants' which 31% of firms indicated that they had already implemented, and another 39% indicated that would implement if the need arose." These results are similar to what AGC surveys have found regarding construction hiring. 

On December 20, Census released state population estimates for July 1, 2017, along with slight revisions for 2010-16. U.S. population totaled 325.7 million, a gain of 0.72% (2.3 million) from July 1, 2016, slightly less than in the previous three years (0.74% in 2016; 0.76% in 2015 and 2014). Idaho was the fastest-growing state (2.2%, up from 1.9%, 4th-fastest in 2016), followed by Nevada (2.0%, vs. 1.9%, 2nd in 2016), Utah (1.9%, vs. 2.0%, 1st), Washington (1.7%, vs. 1.8%, 5th) and Florida (1.6%, vs. 1.9%, 3rd). The growth rate accelerated the most in Idaho and Maine (from 0.2% to 0.4%). The largest increases again were in Texas (400,000), Florida (328,000) and California (240,000). Washington added 22,000 more residents than it had added in 2016; Florida added 17,000 more than in 2016. Population dipped in eight states. Illinois lost the most residents (-34,000, -0.3%); Wyoming had the largest percentage loss (-1.0%, -5,600). California had the biggest slowdown in population growth, adding 67,000 fewer residents than in 2016. Population growth rates and changes in them over time can significantly affect demand for various types of construction as well as state and local revenues to fund projects.

The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved. Sign up at http://store.agc.org.