Construction employment and spending grow in past year but slip in latest month
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Nonfarm payroll employment increased by 162,000, seasonally adjusted, in July and 2,276,000 (1.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. Construction employment totaled 5,793,000, down by 6,000 from June but up by 166,000 (3.0%) over the past year. Total hours worked in construction (aggregate weekly hours) increased by 3.5% since July 2012, implying that contractors are both lengthening working hours slightly and hiring new workers. Residential construction employment (residential building and specialty trade contractors) climbed by 6,300 for the month and 92,100 (4.5%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) fell by 11,500 in July but rose by 74,300 (2.1%) year-over-year. Architectural and engineering services employment, a harbinger of future demand for construction, rose 2.3% over the year. The unemployment rate for jobseekers who last worked in construction tumbled to the lowest July level in five years—9.1%, down from 12.3% in July 2012. (Industry unemployment data are not seasonally adjusted and should only be compared year-over-year, not across months.) AGC is conducting a survey of members to evaluate the current supply and outlook for skilled labor; click here to participate.
Construction Spending in June totaled $884 billion at a seasonally adjusted annual rate, down 0.6% from May and up 3.3% from June 2012, the Census Bureau reported on Thursday. Census corrected errors it found in residential improvements and revised up the 2012 annual total by $14 billion to $857 billion, a rise of 8.7% from 2011 (revised from 7.0%). Private residential spending was flat for the month and up 18% year-over-year. Private nonresidential spending slid 0.9% in June but rose 1.4% from a year ago. Public construction spending fell 1.1% in June and 9.3% over 12 months. Of the three residential components, new single-family construction fell 0.8% in June but jumped 28% year-over-year; new multifamily spending, -3.3% and 41%; and improvements to existing single- and multifamily buildings, 1.3% and 4.4%. The three largest private nonresidential components (in descending order of current size) varied: power construction (including conventional and renewable power plus oil and gas fields and pipelines) rose 3.3% for the month and 5.2% from a year ago; manufacturing construction fell 1.8% and 1.9%, respectively; and commercial (new and renovated retail, warehouse and farm), -5.6% and 0. Of the top two public categories, highway and street construction tumbled 2.4% and 12%, respectively, while educational fell 0.4% and 15%. Census also posted 2012 and revised 2011 totals for private nonresidential construction spending by state.
Construction employment rose in 191 out of 339 metropolitan areas (including divisions of larger metros) in the 12 months through June (the largest number of gainers since March 2012), declined in 97 and was flat in 51, according to an analysis of BLS data that AGC released on Tuesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers. Metro data is not seasonally adjusted.) The number of metro areas with gains rose for the fifth month in a row after bottoming out at 146 in January. Two areas tied for most construction jobs added in the past year: the Boston-Cambridge-Quincy division (9,900 construction jobs, 19%) and Houston-Sugar Land-Baytown (9,900 construction jobs, 6%). The largest percentage gains occurred in Pascagoula, Miss. (33%, 1,500 combined jobs) and Eau Claire, Wis. (31%, 1,000 combined jobs). The largest construction job losses were in Riverside-San Bernardino-Ontario, Calif. (-5,500 construction jobs, -9%) and Northern Virginia (-2,900 combined jobs, -4%). The steepest percentage declines occurred in Rockford, Ill. (-13%, -600 combined jobs) and Pocatello, Idaho (-13%, -200 combined jobs).
Compensation costs for private industry, a measure of wages and salaries, benefits and required employer payments such as unemployment and workers’ compensation, increased 0.4%, seasonally adjusted, in the second quarter of 2013 and 1.9% over 12 months, BLS reported on Wednesday. Compensation costs for construction rose 0.3% in the quarter and 2.1% year-over-year. BLS does not break out residential and nonresidential construction in this data set. Because the generally lower-paying residential sectors grew faster than nonresidential over the past year, it is likely the compensation in both actually went up more than 2.1%. Wages and salaries in construction rose 0.4% last quarter and 1.7% over four quarters.
Real (net of inflation) gross domestic product (GDP) increased 1.7% at a seasonally adjusted annual rate in the second quarter, up from a revised 1.1% in the first quarter, the Bureau of Economic Analysis (BEA) reported on Wednesday. BEA introduced several methodological and conceptual changes, along with routine revisions. Real private investment in nonresidential structures (including wells and mines) climbed 6.8% after plunging 26% in the first quarter, when well-drilling shrank. Real residential investment climbed 13% for the second consecutive quarter. Real government investment in structures was flat after dropping for 10 consecutive quarters. The price index for private nonresidential structures posted a 4.8% rise at a seasonally adjusted annual rate, up from 4.0% in the first quarter. The price index for residential investment rose 5.7%, following a 6.3% increase. The price index for government investment climbed at a 2.3% rate in both quarters.
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