Half of metros gain construction jobs in past year; Reed says starts sag from a year ago
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Nonfarm payroll employment increased in April from a year earlier in 274 out of 372 metropolitan areas, decreased in 88 and remained unchanged in 10, the Bureau of Labor Statistics reported on Wednesday. An AGC analysis showed that of the 339 metro areas (including divisions of larger metros) for which BLS reports construction employment, 170 had increases, 123 had decreases and 46 were stagnant. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employees. Metro data is not seasonally adjusted.) Pascagoula, Miss. again added the highest percentage of new construction jobs (45%, 1,700 combined jobs), followed by Napa, Calif. (36%, 800 combined jobs) and Merced, Calif. (19%, 300 combined jobs). The Dallas-Plano-Irving division again added the most jobs (11,500 combined jobs, 11%), closely followed by Houston-Sugar Land-Baytown (11,400 construction jobs, 6%). The largest job losses again were in the Chicago-Joliet-Naperville division (-5,900 construction jobs, -5%), Northern Virginia (-3,200 combined jobs, -5%) and Cincinnati-Middletown, Ohio-Ky.-Ind. (-2,400 combined jobs, -6%). Bellingham, Wash. lost the highest percentage (-20%, -1,300 combined jobs), followed by Decatur, Ill. (-18%, -700 combined jobs).
The value of nonresidential construction starts in April skidded 44% from April 2012, not seasonally adjusted, Reed Construction Data reported on Thursday, based on data it collected. Year-to-date starts for the first four months of 2013 combined declined 11% in value from the same period of 2012. Year-to-date results varied greatly by type: industrial (manufacturing) starts jumped 31% and commercial start rose 4.9%, while institutional building starts slipped 1.5% and heavy engineering (nonbuilding) starts plummeted 29%.
The Multifamily Production Index (MPI), which measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, “inched down two points to an index level of 52, the fifth straight quarter with a reading over 50,” the National Association of Home Builders (NAHB) reported on Thursday. “The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse. In the first quarter of 2013, the MPI component tracking builder and developer perceptions of market-rate rental properties dropped four points to 61, but has been above 60 for seven consecutive quarters--the longest sustained period of strength since the inception of the index in 2003. For-sale units dipped four points to 42, while low-rent units rose two points to 55. ‘The apartment sector overall has largely recovered since the downturn, so we have now reached a level of development that is close to equilibrium and can continue at this pace,’ said W. Dean Henry, CEO of Legacy Partners Residential in Foster City, Calif., and chairman of NAHB's Multifamily Leadership Board. ‘With that said, there are still certain markets around the country that have room to grow.’ The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, rose seven points to 38. With the MVI, lower numbers indicate fewer vacancies. After peaking at 70 in the second quarter of 2009, the MVI improved consistently through 2010 and has been at a fairly moderate level throughout 2011 and 2012. Historically, the MPI and MVI have performed well as leading indicators of U.S. Census figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance.” Chief Economist David Crowe said, “There are still issues facing builders and developers that could have an impact on future production, such as a shortage of labor with basic construction skills and rising prices for some building materials.”
“Eight of the 15 fastest-growing large U.S. cities and towns for the year ending July 1, 2012 were in Texas,” as were five of the 10 cities and towns that added the most people, the Census Bureau reported on May 23. “The fastest-growing municipalities are spread across Texas, from the High Plains of west Texas to the Houston suburbs. San Marcos, along the Interstate 35 corridor between Austin and San Antonio, had the highest rate of growth [4.9%] among all U.S. cities and towns with at least 50,000 people. Completing the top five nationwide were Midland and Cedar Park, both in Texas; South Jordan, Utah; and Clarksville, Tenn. …The Texas cities that added the most people included Houston, San Antonio, Austin, Dallas and Fort Worth. New York [added 67,058 people and] topped the list and was the only city among the top 15 outside the South or West. Three cities were in California: Los Angeles, San Diego and San Jose.” Where population growth occurs is an important driver of demand for various types of construction. “These new numbers raise the prospect that large cities may be in store for something of a demographic comeback,” Brookings Institution demographer William Frey wrote on Tuesday. “From 2010 to 2012, ...cities with over one-half million population grew considerably more rapidly [1.1% per year] than they did, on average, over the previous 10 years [0.5%]. Among the 51 metropolitan areas with more than one million residents, 24 saw their cities grow faster than their suburbs from 2011 to 2012. …That was true of just eight metro areas from 2000 to 2010.”
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