Construction employment hits six-year high; Beige Book finds mixed conditions
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Nonfarm payroll employment increased by 295,000 in February, seasonally adjusted, and by 3,296,000 (2.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. Construction employment rose by 29,000 for the month and 321,000 (5.3%) over the year to 6,353,000, the highest total since February 2009. Residential construction employment (residential building and specialty trade contractors) climbed by 16,700 for the month and 167,800 (7.4%) over 12 months. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) increased by 12,000 in February and 153,400 (4.1%) year-over-year. Employees are working longer hours: average weekly hours in construction in February totaled 39.6 hours, the highest figure since the series began in March 2006. The number of jobseekers who last worked in construction dropped from 1,098,000 in February 2014, not seasonally adjusted, to 906,000, the lowest February total since 2006. The unemployment rate for such workers fell from 12.8% to 10.6%, the lowest February rate since 2007. The record average weekly hours and the steep decline in unemployed workers suggest that contractors may be having trouble filling positions, despite the large rise in hiring. (Industry unemployment data are not seasonally adjusted and should only be compared year-over-year, not across months.)
"Reports from the 12 Federal Reserve districts indicate that economic activity continued to expand across most regions and sectors from early January through mid-February," the Fed reported on Wednesday in its latest "Beige Book," a compilation of informal soundings of business conditions in the districts (which are referenced by the name of their headquarters cities). Residential construction "activity was mixed, with some districts reporting disruptions due to severe weather....Commercial construction increased in most Districts. Contacts in New York, Richmond, Atlanta, St. Louis and San Francisco noted stable to strong multifamily construction....In Boston, contacts noted that speculative construction remains limited due to high construction costs....The Cleveland, Chicago and San Francisco districts indicated that prices of some construction materials rose during the reporting period."
The National Highway Construction Cost Index, a measure of the cost of state highway construction projects, rose 3.2% in the third quarter of 2014, following a 0.5% increase in the second quarter, the Federal Highway Administration reported on Thursday. The index increased 1.4% from the third quarter of 2013 to the third quarter of 2014.
CPWR - The Center for Construction Research and Training on Wednesday issued a new quarterly report on Employment Trends and Projections in Construction. The report notes that "Hispanic workers were responsible for nearly 60% of the employment growth in construction, adding more than half a million jobs between 2012 and 2014; of these jobs, 385,000 were held by foreign-born Hispanics (Chart 2)." Chart 6 shows change in construction employment, by occupation, from 2010 to 2013. Power-line installers led with a 64% increase, followed by laborers (24%). The steepest losses occurred for cement masons (-44%), drywall installers (-25%) and construction managers (-23%). Chart 8 shows 2011-13 union membership as an average percent of employment for 17 construction occupations. Ironworkers were the most unionized (51%), followed by highway maintenance workers (34%). Least unionized were roofers and painters (8%). By state, construction worker union membership ranged from an average of 40% in Illinois to less than 1% in North Carolina. Projections of construction employment change between 2012 and 2022 by state, from Projections Central, ranged from 50% in Nevada to 3% in Maine. Projections Central also has projections by occupation through 2016 and 2022 for each state.
Apartment rents and occupancy rates in oil-dependent Williston, N.D. and Odessa and Midland, Texas are beginning to weaken, apartment research firm Axiometrics reported yesterday, based on its own calculations and a Reuters article on March 2. "Williston rents have decreased by 15% to 20%, depending on the property, in the past couple of months, according to the Reuters article. The average effective rent in Odessa increased just $3 in January 2015, to $1,240, the smallest monthly increase since January 2014, according to statistics from Axiometrics, which compiles its metrics by calling every property in its database every month. Midland's average effective rent was $1,475 in the fourth quarter of 2014. More telling, Odessa occupancy, which was as high as 99.0% in August 2013 and 98.6% in May 2014, was 96.7% in January 2015, according to Axiometrics apartment data. No apartments have been identified for delivery in Odessa in 2015-2016 after 914 units came to market from the fourth quarter of 2012 through the second quarter of 2014, according to Axiometrics' pipeline statistics. On the other hand, 1,173 units are expected in Midland this year, adding onto the 741 apartments delivered from the third quarter of 2013 through all of 2014. Occupancy is not falling in Williston, where about 1,800 energy-related job openings exist, the Reuters article stated, despite some job cuts announced by Halliburton and others. Some 969 new units were delivered to the market last year, with 875 more identified for delivery in 2015, according to Axiometrics' pipeline metrics....unless oil prices tank some more, North Dakota developers see room for even more construction. 'We still, even with all we're building, don't have enough housing in the region,' Reuters quoted Terry Metzler of Granite Peak Development as saying."
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