Construction employment jumps in January; spending inches up in December
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Nonfarm payroll employment increased by 113,000, seasonally adjusted, in December and 2,238,000 (1.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported Friday. (Today’s data included routine once-a-year revisions to monthly data back to January 2009.) Construction employment rose by 48,000 (the largest one-month gain since April 2007) to 5,922,000. Over the past 12 months the industry added 179,000 employees (3.1%). Residential construction employment (residential building and specialty trade contractors) climbed by 16,800 for the month and 121,400 (5.8%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) rose by 31,300 from December and 57,100 (1.6%) year-over-year. All five residential and nonresidential segments added workers for the month and year. The unemployment rate for jobseekers who last worked in construction fell to the lowest January level in six years—12.3%, down from 16.1% in January 2013 and 22.5% in January 2011, the low point for construction employment. (Industry unemployment data are not seasonally adjusted and should only be compared year-over-year, not across months.) Since January 2011 the number of unemployed construction workers has dropped by 834,000, not seasonally adjusted. But construction employment rose by only 490,000, implying that many experienced workers left the industry for employment elsewhere, further training or schooling, retirement, or left the workforce. These departures may make it hard for contractors to find skilled workers if demand rises further, even though the unemployment rate remains higher than the overall economy’s 7.0% rate (not seasonally adjusted; 6.6%, seasonally adjusted), and wage growth and job openings do not yet signal any tightness nationally.
Construction spending in December totaled $930 billion at a seasonally adjusted annual rate, up 0.1% from the November total (which was revised down by $5 billion) and up 5.3% from December 2012, the Census Bureau reported last week. The number was the highest since March 2009. The annual total was $898 billion, up 4.8% from 2012. Private nonresidential spending slipped 0.7% for the month, 1.7% from December 2012 and 0.4% for the full year. Private residential spending rose 2.6% for the month, 18% from December 2012 and 18% for the full year. Public construction spending slumped 2.3% for the month, 0.7% from December 2012 and 2.8% for the full year. All three residential components rose. New single-family construction gained 3.4% for the month and 28% for the full year. New multifamily construction climbed 0.5% and 44%, respectively. Spending on improvements to existing single- and multifamily buildings added 2.0% and 3.8%. The largest private nonresidential segment—power (including conventional and renewable power plus oil and gas fields and pipelines)—gained 1.9% for the month but plunged 14% for the full year. (Power construction in late 2012 surged as contractors raced to finish wind projects to qualify for an expiring tax credit.) The next three private osegments (in descending order of 2013 size) were mixed: manufacturing construction, -5.1% and 6.1%; commercial (new and renovated retail, warehouse and farm), -1.0% and 8.8%; and office, 1.2% and 9.6%. Of the top two public categories, highway and street construction rose 1.8% and 1.0%, while public educational spending tumbled 7.2% and 8.4%.
Construction employment increased in 192 out of 339 metropolitan areas (including divisions of larger metros) from December 2012 to December 2013, declined in 84 and was flat in 63, according to an analysis of Bureau of Labor Statistics (BLS) data that AGC released last Wednesday. (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 December are not meaningful.) The Santa Ana-Anaheim-Irvine, Calif. division added the largest number of jobs in the past year (11,200 construction jobs, 15%); followed by Atlanta-Sandy Springs-Marietta, Ga. (8,400 construction jobs, 10%). The largest percentage gains occurred in Steubenville-Weirton, Ohio-W.V. (31%, 500 combined jobs) and Lake Charles, La. (28%, 2,700 construction jobs). The largest job losses were in Las Vegas-Paradise (-3,300 construction jobs, -8%); followed by the Edison-New Brunswick, N.J. division (-3,200 combined jobs, -9%); Cincinnati-Middletown, Ohio-Ky. (-2,900 jobs, -8%) and the Gary, Ind. division (-2,800 construction jobs, -15%). The largest percentage declines for the past year were in Modesto, Calif. (-29%, -1,900 combined jobs) and Gary.
Last Tuesday, the Congressional Budget Office (CBO) presented its latest projections for the federal budget, including the accounts that fund federal aid for highway and transit construction. “It is likely that the highway account will likely have difficulty meeting obligations sometime during the latter half of Fiscal Year 2014….Under the baseline, CBO estimates that the transit account will be able to meet all obligations during Fiscal Year 2014, but will be unable to meet obligations at some point in Fiscal Year 2015.”
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