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AGC's Data DIGest: Sept. 14 – Oct. 3, 2013

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.

Federal closure has varied construction impacts; most metros, states add jobs

Please join Ken, AIA Chief Economist Kermit Baker and Reed Construction Data’s Chief U.S. Economist, Bernard Markstein for a complimentary webinar on construction outlook  on Thursday, Oct. 17.

The partial federal government shutdown has both immediate and longer-term consequences for construction. AGC’s Federal Government Shutdown Resource Center has information regarding numerous federal agencies and programs, such as the E-Verify program that many employers use to check workers’ immigration status. Highway construction funded in part by the Highway Trust Fund is not affected. But federal agencies that directly award construction contracts or that issue permits are not operating. Review of applications for the Keystone XL pipeline and liquefied natural gas export terminals is not proceeding. The Census Bureau did not issue its construction spending report on October 1, and the Bureau of Labor Statistics will not report on employment as scheduled on Friday. Depending on the length of the shutdown, companies that depend on federal contracts and purchases may cancel or delay orders for construction of plants, offices and other facilities.

Construction employment rose in 194 out of 339 metropolitan areas (including divisions of larger metros) in the 12 months through August, declined in 88 and was flat in 57, according to an analysis of Bureau of Labor Statistics (BLS) data that AGC released on September 26. (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 August are not meaningful.) The Los Angeles-Long Beach-Glendale metro division added the most construction jobs in the past year (8,900 jobs, 8%); followed by Boston-Cambridge-Quincy (8,700, 16%); Houston-Sugar Land-Baytown (8,200, 5%) and Atlanta-Sandy Springs-Marietta (8,100, 9%). The largest percentage gains occurred in Pascagoula, Miss. (36%, 1,500 combined jobs); Eau Claire, Wis. (30%, 1,000 combined jobs); Fargo, N.D.-Minn. (25%, 2,100 combined jobs) and Lake Charles, La. (22%, 2,100 combined jobs). The largest job losses were in Sacramento-Arden-Arcade-Roseville (-4,900 construction jobs, -12%); followed by the Gary, Ind. division (-4,100 construction jobs, -18%); Riverside-San Bernardino-Ontario, Calif. (-3,400 construction jobs, -5%) and Northern Virginia (-3,300 combined jobs, -5%). Gary had the largest percentage decline, followed by Rockford, Ill. (-17%, -800 combined jobs); Modesto, Calif. (-14%, -1,000 combined jobs); Shreveport-Bossier City, La. (-13%, -1,100 construction jobs) and South Bend-Mishawaka, Ind.-Mich. (-13%, -600 combined jobs).

In August, seasonally adjusted nonfarm payroll employment increased from a year earlier in 49 states and the District of Columbia, and decreased in Alaska, BLS reported on September 20. Seasonally adjusted construction employment climbed in 35 states, fell in 14 states and D.C., and held steady in Vermont, an AGC analysis showed. Wyoming had the steepest year-over-year percentage increase (12.8%, 2,700 jobs), followed by Mississippi (12.0%, 5,700 jobs), Colorado (8.8%, 10,100 jobs) and Hawaii (8.8%, 2,600 jobs). California added the most construction jobs for the year (29,100, 5.0%), followed by Texas (24,200, 4.1%), Florida (19,500, 5.7%) and Louisiana (10,600, 8.4%). Indiana lost the most jobs over the past year and experienced the steepest rate of decline (-10,100 jobs, -8.1%). Other states experiencing large job losses for the year include Ohio (-6,100 jobs, -3.4%), North Carolina (-3,500 jobs, -2.1%) and Alabama (-2,000 jobs, -2.5%). Rhode Island (-4.4%, -700 jobs), Montana (-4.4%, -1,000 jobs) and D.C. (-3.7%, -500 jobs) also experienced steep percentage declines. Of the 26 states that added construction jobs from July to August, South Dakota had the largest percentage gain (6.7%, 1,300 jobs), followed by Vermont (3.7%, 500 jobs), Wisconsin (3.6%, 3,300 jobs) and Connecticut (3.0%, 1,600 jobs). California added the largest number of jobs for the month (7,700, 1.3%), followed by New York (4,900, 1.6%), Florida (4,700, 1.3%) and Wisconsin. Employment was stable over the month in Alabama and Maine, while 22 states and D.C. lost construction jobs. Oklahoma had the steepest percentage drop for the month (-4.2%, -3,000 jobs), followed by Hawaii (-3.6%, -1,200 jobs), Nebraska (-2.7%, -1,200 jobs) and Utah (-2.6%, -1,900 jobs). Texas lost the most jobs between July and August (-4,900, -0.8%), followed by Illinois (-4,100, -2.2%), Arizona (-3,100, -2.5%) and Oklahoma. (BLS combines mining and logging with construction in D.C., Hawaii, Nebraska, South Dakota and three other states.)

The value of new construction starts in August advanced 2% relative to July, McGraw Hill Construction reported on September 20, based on data it collected. “Residential building stayed on the upward track [up 4% from July at a seasonally adjusted annual rate], and nonbuilding construction (public works and electric utilities) rebounded [11%] after its loss of momentum in July. At the same time, nonresidential building retreated [-8%] from its improved July amount, continuing the up-and-down pattern that’s been present during 2013. For the first eight months of 2013, total construction starts on an unadjusted basis [were] up 1% from the same period a year ago. If electric utilities are excluded from the year-to-date statistics, total construction starts in the first eight months of 2013 would be up 10%.” Residential starts jumped 27% year-to-date; nonresidential building starts slipped 3%; and nonbuilding starts, including utilities, tumbled -21%.

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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