Construction spending rises in November; most metros add jobs
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Construction spending in November totaled $934 billion at a seasonally adjusted annual rate, up 1.0% from the October total (which was revised up by $16 billion) and up 5.9% from November 2012, the Census Bureau reported on Thursday. The number was the highest since March 2009. Private nonresidential spending jumped 2.7% from October but only 1.0% from November 2012. Private residential spending rose 1.9% for the month and 17% year-over-year. Public construction spending slumped 1.8% from October and 0.2% compared with November 2012. Of the three residential components, new single-family construction rose 1.8% for the month and 18% year-over-year. New multifamily construction soared 0.9% and 36%, respectively. Spending on improvements to existing single- and multifamily buildings jumped 2.2% and 10%. The largest private nonresidential segment—power (including conventional and renewable power plus oil and gas fields and pipelines)—gained 3.3% for the month but plunged 24% from a year ago, and 5.8% year-to-date. (Power construction in late 2012 surged as contractors raced to finish wind projects to qualify for an expiring tax credit.) The next three segments (in descending order of current size) rose in both periods: manufacturing construction, 1.2% and 16%; commercial (new and renovated retail, warehouse and farm), 4.7% and 21%; and office, 4.6% and 11%. Of the top two public categories, highway and street construction fell 0.4% for the month but climbed 4.62% from a year ago, while public educational spending rose 1.1% from October but was unchanged from November 2012.
Construction employment increased in 211 out of 339 metropolitan areas (including divisions of larger metros) in the 12 months through November, declined in 67 and was flat in 61, according to an analysis of Bureau of Labor Statistics (BLS) data that AGC released last Tuesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers. Because metro data is not seasonally adjusted, comparisons with months other than November are not meaningful.) Atlanta-Sandy Springs-Marietta added the most jobs in the past year (10,500 construction jobs, 12%), followed by the Los Angeles-Long Beach-Glendale metro division (9,100 construction jobs, 8%) and the Santa Ana-Anaheim-Irvine, Calif. division (8,200 construction jobs, 11%). The largest percentage gains occurred in Steubenville-Weirton, Ohio-W.Va. (29%, 500 combined jobs); Eau Claire, Wis. (27%, 800 combined jobs); Fargo, N.D.-Minn. (24%, 1,900 combined jobs) and Pascagoula, Miss. (24%, 1,100 combined jobs). The largest job losses occurred in Cincinnati-Middletown, Ohio-Ky. (-4,000 combined jobs, -10%); followed by Raleigh-Cary, N.C. (-3,100 combined jobs, -10%), Baton Rouge, La. (-2,800 construction jobs, -6%) and Gary, Ind. (-2,300 construction jobs, -11%). The largest percentage declines for the past year were in Modesto, Calif. (-24%, -1,500 combined jobs), Lake Havasu City-Kingman, Ariz. (-14%, -300 combined jobs); Anniston-Oxford, Ala. (-11%, -100 combined jobs); Gary and Mobile, Ala. (-11%, -1,300 combined jobs). Among the 19 metro areas that hit a new November construction employment peak, Fargo experienced the largest percentage increase (24% higher than in November 2012). Lake Havasu City-Kingman experienced the largest percentage decline compared to its November peak (-76% since November 2005).
Census released state population totals as of July 1, 2013 on December 30. U.S. population increased by 0.72% from July 1, 2012, virtually the same growth rate as in the two previous years but down from an average of 0.93% per year between 2000 and 2010. As in 2012, the highest growth rates were in North Dakota (3.1%) and D.C. (2.1%). Two states lost population: Maine (-199 people or -0.01%) and West Virginia (-2,376 or -0.13%). An AGC analysis showed that, relative to their rankings over the past three years combined, six states moved up at least five positions in 2013: Nevada (6 out of 50 states plus D.C.in 2012-13 vs. 11 in 2010-13), Idaho (13 vs. 20), Montana (16 vs. 21), Oklahoma (18 vs. 23), Ohio (41 vs. 46) and Rhode Island (45 vs. 51). A high current ranking signals relatively strong construction opportunities, while an increased recent ranking can be a harbinger of improving opportunities for construction relative to previous conditions within a state. Rankings slipped at least five places in 2012-13 relative to 2010-13 in five states: Alaska (27 vs. 14), Arkansas (37 vs. 32), Kansas (39 vs. 34), New Mexico (48 vs. 38) and Pennsylvania (49 vs. 43).
“Businesses occupied an additional 8.5 million square feet of office space” in the fourth quarter of 2013, according to data from real-estate research firm Reis Inc., the Wall Street Journal reported today. “That was only a 0.25% increase from the third quarter, but Reis said it was the largest gain since the third quarter of 2007. The expansion of tenants was offset by the completion of 9.1 million square feet of new office space during the quarter, the most since the fourth quarter of 2009, according to Reis, which tracks 79 major U.S. office markets….The largest declines in vacancies were in Cleveland (down 1 percentage point), Syracuse” (-0.9 points), Memphis and San Bernardino, Calif. (both -0.7 points). The worst increases in vacancies were in Tacoma, Wash. (1.6 points); Columbus, Ohio (1.4 points); and Tucson, Ariz. (1.1 points).
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