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AGC Data DIGest: August 16-20, 2021

Construction employment remains below pre-COVID peak in 36 states; reports on starts are mixed

Seasonally adjusted construction employment in July trailed the February 2020 level in 36 states, exceeded it in 14 states, and was unchanged in the District of Columbia, according to AGC’s analysis of Bureau of Labor Statistics (BLS) data posted today. (February 2020 was the month in which employment peaked nationally before plunging during widespread shutdowns in March and April 2020.) Texas lost the most construction jobs since February 2020 (-56,200 jobs or -7.2%), followed by New York (-52,600, -13%), California (-35,100, -3.8%), and Louisiana (-2,100, -15%). Louisiana recorded the largest percentage loss, followed by Wyoming (-14%, -3,100 jobs) and New York. Utah added the most jobs (7,900, 6.9%), followed by North Carolina (5,700, 2.4%) and Idaho (4,500, 8.2%). Idaho added the highest percentage, followed by South Dakota (7.5%, 1,800) Utah, and Rhode Island (4.9%, 1,000). For the month, construction employment declined in 18 states, increased in 30 states, and held steady in Kansas, Tennessee, and D.C. North Carolina added the most construction jobs from June to July (4,300, 1.8%), followed by New Jersey (4,000, 2.7%) and Illinois (3,700, 1.7%). The largest monthly percentage increases occurred in New Jersey and Connecticut (1,500 jobs), followed by South Carolina (2.4%, 2,600) and Wyoming (2.1%, 400). Colorado lost the most construction jobs for the month (-1,600, -0.9%), followed by losses of 1,500 jobs in Pennsylvania (-0.6%), Texas (-0.2%), and Oklahoma (-1.9%). New Hampshire had the largest percentage loss (-2.2%, -600 jobs), followed by 1.9% losses in Oklahoma and Arkansas (-1,000 jobs). (BLS reports combined totals for mining, logging, and construction in D.C., Delaware and Hawaii. Because there are few, if any, mining and logging jobs in these locations, AGC treats the levels and changes as solely construction employment.)

Construction starts, not seasonally adjusted, leaped 19% y/y in July from July 2020, data firm ConstructConnect reported on Monday. Year-to-date starts for January-July 2021 rose 6.1% from the same months in 2020. Year-to-date nonresidential starts declined 7.1%: nonresidential building starts fell 11% (commercial, -14%; institutional, -12%; and industrial [manufacturing], -1.3%), while engineering (civil) starts dipped 0.6% (including road/highway, up 4.5%; water/sewage, up 11%; power and other miscellaneous, up 7.6%; bridges, down 27%). Residential starts soared 26% year-to-date (single-family, 36%, and apartments, 1.5%).

Total construction starts (in dollars) slipped 3% from June to July at a seasonally adjusted annual rate, with “all three sectors (residential, nonresidential building and nonbuildings) moving lower in July,” but unadjusted starts soared 15% year-to-date, Dodge Data & Analytics reported on Wednesday. Nonbuilding starts dipped 1% in July. Year-to-date, nonbuilding starts edged up 2%: environmental public works starts were up 35%; utility/gas plant starts, up 5%; highway and bridge starts, down 4%; and miscellaneous nonbuilding starts, down 19%. Nonresidential building starts slipped 7% in July. Year-to-date starts were up 4%: commercial, up 5%; manufacturing, up 45%; institutional, down 1%. Residential starts fell 6% in July. Year-to-date starts were up 30%: single-family, up 34%, and multifamily, up 19%.

Housing starts (units) slid 7.0% at a seasonally adjusted annual rate from June to July but rose 2.5% y/y from the July 2020 level, the Census Bureau reported on Wednesday. Year-to-date starts for January-July 2021 rose 22% from the same months in 2020. Single-family starts fell 4.5% for the month but rose 27% year-to-date. Multifamily (five or more units) starts fell 14% for the month but rose 9.7% year-to-date. Residential permits increased 2.6% from June and 26% year-to-date, as single-family permits declined 1.7% for the month but increased 29% year-to-date, while multifamily permits climbed 11% and 19%, respectively.

The Architecture Billings Index (ABI) slipped in July to 54.6 from 57.1 in June and 58.5 in May, the American Institute of Architects reported on Wednesday. AIA says, “The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.” 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. Any score above 50 means that firms with increased billings outnumbered firms with decreased billings. Scores by practice specialty (based on three-month moving averages) topped 50 for the sixth time in a row: commercial/industrial, 58.4 (down from 59.0 in June); institutional, 55.4 (down from 56.0); multifamily residential, 54.7 (down from 57.0); mixed practice, 54.4 (down from 56.0). A design contracts index slipped to 58.0, down from 58.9.

Delivery times for imported cargo have worsened again. “Anchored off the adjacent ports of Los Angeles and Long Beach in recent days were 37 container ships, according to the Marine Exchange of Southern California, the highest number since February, when 40 ships waited there,” the Wall Street Journal reported on Wednesday. “Just a couple of months ago, the number of container ships at anchor in the two ports, which together handle more than a third of all U.S. seaborne imports, had dwindled to nine. In normal times, the number is one, or none….The crush of imports is overwhelming Southern California warehouses, driving up rents and making space harder to find. Last month, the two main railroads carrying containers from the ports temporarily restricted shipments from the West Coast into Chicago because boxes were piling up at their Midwestern hubs as containers arrived faster than they could be switched for onward transport. Containers are stacking up at marine terminals, too, as the record volumes strain truck and rail capacity. At APM Terminals in Los Angeles, part of the A.P. Moeller-Maersk A/S group, boxes are being stored for an average of nine to 10 days before they move inland, compared with a pre-pandemic average of two to three days, said Tom Boyd, a spokesman.”