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AGC's Data DIGest: November 19 - 22, 2013

Job gains spread to 39 states; material, labor costs remain mild; starts rise, MHC 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.

In October, seasonally adjusted nonfarm payroll employment increased from a year earlier in 49 states and decreased in Alaska and the District of Columbia, the Bureau of Labor Statistics (BLS) reported Friday. Seasonally adjusted construction employment climbed in 39 states—the largest total in 18 months—and declined in 11 states and D.C., an AGC analysis showed. Mississippi had the steepest year-over-year percentage increase (19%, 9,300 jobs), followed by Connecticut (11%, 5,500 jobs), Louisiana (8.3%, 10,700 jobs) and Florida (7.7%, 26,600 jobs). Florida added the most construction jobs for the year, followed by California (26,000, 4.3%) and Texas (14,500, 2.4%). Indiana lost the most jobs over the past year and experienced the steepest rate of decline (-11,800 jobs, -9.5%). Other states with large job losses for the year include Illinois (-4,500 jobs, -2.4%) and North Carolina (-3,600 jobs, -2.1%). Montana (-7.3%, -1,700 jobs) and D.C. (-5.0%, -700 jobs) also experienced steep percentage declines. Of the 32 states that added construction jobs from September to October, Alaska had the largest percentage gain (6.0%, 1,000 jobs), followed by Nevada (5.9%, 3,100 jobs). Florida added the most jobs for the month (10,500, 2.9%), followed by Louisiana (3,400, 2.5%) and Nevada. Employment was stable over the month in Delaware and Wyoming, while 16 states and D.C. lost construction jobs. Arizona had the steepest percentage drop for the month (-2.7%, -3,300 jobs), followed by Hawaii (-2.4%, -800 jobs) and New Jersey (-2.2%, -3,000 jobs). Texas lost the most jobs between September and October (-4,000, -0.7%), followed by New York (-3,900, -1.2%), Arizona and New Jersey. (BLS combines mining and logging with construction in D.C., Delaware, Hawaii and four other states.)

The producer price index (PPI) for finished goods fell 0.2%, not seasonally adjusted (and seasonally adjusted), in October and inched up just 0.3% over 12 months, the Bureau of Labor Statistics (BLS) reported on Thursday. The PPI for inputs to construction—a weighted average of the cost of all materials used in construction plus items consumed by contractors such as diesel fuel—slumped 0.5% for the month and rose 0.6% year-over-year. The PPIs for inputs to different types of construction all declined for the month but varied slightly year-over-year: residential, -0.4% and 1.2%; total nonresidential (and also industrial structures), -0.5% and 0; commercial structures, -0.4% and 0.6%; and other nonresidential, -0.7% and -0.3%. Many major construction inputs had flat or falling prices for the month: diesel fuel, -2.6% in October and -9.4% over 12 months; copper and brass mill shapes, 0 and -7.5%; aluminum mill shapes, -0.7% and -5.0%; steel mill products, 0 and -2.4%; architectural coatings, 0 and -1.0%; plastic construction products, -0.3% and -0.7%; asphalt paving mixtures and blocks, -0.3% and 1.2%; and concrete products, 0.1% and 2.9%. Two indexes fell for the month but still jumped year-over-year: gypsum products, -0.8% and 16%, and insulation materials, -1.6% and 7.7%. The PPI for lumber and plywood soared in both periods: 1.9% and 14.5%. PPIs for new nonresidential construction all increased for the month and year-over-year: warehouses 5.6% in October (reversing a 5.7% drop in September) and 2.0% over 12 months; offices, 1.5% and 2.7%; schools, 1.6% and 2.9%; health care construction, 1.0% and 3.1%; and industrial buildings, 1.8% and 4.0%. PPIs for new, repair and maintenance work on nonresidential buildings by electrical contractors rose 0.2% and 1.8%; roofing contractors, 0.5% and 1.9%; concrete contractors, 0.9% and 2.6%; and plumbing contractors, 1.9% and 4.1%.

Compensation costs for private industry—a measure of wages and salaries, benefits and required employer payments such as unemployment and workers’ compensation—increased 0.3%, not seasonally adjusted, in the third quarter of 2013 and 1.9% over 12 months, BLS reported on Tuesday. Compensation costs for construction rose 0.7% 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 0.8% last quarter and 1.8% over four quarters.

The value of new construction starts increased 5% in October, McGraw Hill Construction (MHC) reported on Wednesday, based on data it compiled. “The gain followed a 13% jump for total construction starts in September, and during both September and October much of the upward push came from groundbreaking for several very large projects. By sector, nonresidential building surged [20%] in October, aided by the start of three massive manufacturing plants, and residential building resumed its upward track [3%] after a September pause. Although nonbuilding construction in October settled back [-6%] from its elevated September pace, the decline was cushioned by the start of structural work valued at $2.8 billion on the Tappan Zee Bridge replacement project in New York. During the first 10 months of 2013, total construction starts on an unadjusted basis [were] up 4% from the same period a year ago.” Year-to-date, nonresidential buildings starts rose 6%, residential building starts climbed 26%, and nonbuilding starts fell 17%.

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


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