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AGC Data DIGest: April 17-26, 2023

Construction employment rises from year ago in 44 states; Dodge, ConstructConnect differ on starts

Seasonally adjusted construction employment rose from March 2022 to March 2023 in 44 states, declined in five states, and was flat in North Dakota and the District of Columbia, according to AGC’s analysis of data BLS posted today. Texas added the most (41,200 jobs, 5.4%), followed by New York (18,200, 4.7%) and Florida (15,100, 2.6%). Rhode Island had the largest percentage gain (11.9%, 2,500), followed by Nevada (8.2%, 8,500), Montana (7.5%, 2,700), and Nebraska (7.5%, 4,300). California lost the most (-7,300, -0.8%), while West Virginia had the largest percentage loss (-7.5%, -2,500). Losses also occurred in Colorado (-1,800, -1.0%), Connecticut (-1,800, -2.9%) and South Dakota (-300, -1.2%). For the month, construction employment rose in 20 states and D.C., fell in 27 states, and held steady in Rhode Island, Alaska, and North Dakota. Texas had the largest gain (5,800, 0.7%), followed by Kentucky (2,600, 3.1%) and Massachusetts (1,900, 1.1%). Kentucky had the largest percentage gain, followed by D.C. (2.6%, 500) and Delaware (2.1%, 500). California lost the most construction jobs in March (-8,200, -0.9%), followed by Washington (-3,600, -1.5%) and Florida (-2,300, -0.4%). The largest percentage losses were in Connecticut (-2.9%, -1,800) and Washington. (For D.C., Delaware, and Hawaii, with few mining or logging jobs, BLS posts combined totals with construction; AGC treats the changes as all from construction.)

Two reports on construction starts differ regarding the first three months of 2023 compared January-March 2022. Total construction starts in current dollars (i.e., not inflation-adjusted) jumped 19%, seasonally adjusted, from February to March but slumped 9% year-to-date, Dodge Construction Network reported on Wednesday. Year-to-date residential starts plummeted 29% with single-family down 37% and multifamily down 12%, while nonresidential building starts rose 6% and nonbuilding starts rose 12%. “Construction starts activity has yet to see the impact of tightening financial conditions in the wake of the failure of Silicon Valley and Signature Banks,” chief economist Richard Branch wrote.

The value of construction starts in current dollars increased 5.0% year-to-date, data firm ConstructConnect reported on Monday. Residential starts plunged 30%, with single-family down 33% and apartments down 24%. Nonresidential building starts leaped 40%, with the largest component—industrial (manufacturing)—starts soaring 194%, institutional starts up 37%, and commercial starts down 2.2%. Engineering (civil) starts rose 30%, with increases for roads of 26%; water/sewage, 20%; power and miscellaneous civil, 65%; bridges, 18%; dams/marine, 7.1%; and airports, 95%.

The Architecture Billings Index (ABI) registered a score of 50.4 in March, up from 48.0 in February and the first reading above 50 since September, the American Institute of Architects (AIA) reported on Wednesday. Any score above 50 means more firms reported increased billings than decreased billings. The ABI is derived from the share of responding architecture firms that report a gain in billings over the previous month less the share reporting a decline in billings, presented on a 0-to-100 scale. AIA calls the index “a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.” Readings for practice specialties (based on three-month averages) varied: mixed practice, 53.9 (down from 55.2 in February); commercial/industrial, 49.7 (up from 48.5); institutional, 48.8 (up from 48.5); and residential (mainly multifamily), 44.2 (down from 45.6). An index of new design contracts slipped to 48.9 from 51.3.

Housing starts (units) in March fell 0.8% at a seasonally adjusted annual rate from the February rate and 17% year-over-year (y/y), the Census Bureau reported on Tuesday. Single-family starts rose 2.7% for the month but fell 28% y/y. Multifamily (five or more units) starts slid 6.7% for the month but climbed 6.1% y/y. Residential permits declined 8.8% for the month and 25% y/y. Single-family permits increased 4.1% from February but plunged 30% y/y. Multifamily permits sank 24% and 18%, respectively.

Highway contractors are invited to complete AGC’s annual highway work zone safety survey by May 12. Responses will be kept confidential. AGC will use the information from this survey as the main focus of a media and public education campaign to be launched the week before Memorial Day, the traditional start of the summer “driving season.” The goal is to educate and encourage drivers to operate more safely in highway work zones.

Chief economists Ken Simonson, AGC; Kermit Baker, AIA; and Alex Carrick, ConstructConnect will present their views on the construction and design outlook in a webinar on May 9, 2-3:30 pm ET.

Note: The next Data DIGest will be sent the week of May 8.

Data DIGest is a weekly summary of economic news. Sign up here. Editor: Ken.Simonson@agc.org, Chief Economist, AGC. Go here for Ken’s PPT or more construction data.