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Construction employment, not seasonally adjusted, increased between July 2018 and July 2019 in 255 (71%) of the 358 metro areas (including divisions of larger metros) for which BLS provides construction employment data, fell in 56 (16%) and was unchanged in 47, according to an analysis AGC released on Wednesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gains occurred in the Los Angeles-Long Beach-Glendale division (12,100 construction jobs, 8%), followed by Phoenix-Mesa-Scottsdale (11,900 construction jobs, 9%) and the Dallas-Plano-Irving division (10,500 combined jobs, 7%). The largest percentage gain occurred in Spokane-Spokane Valley, Wash. (23%, 3,500 combined jobs), followed by Auburn-Opelika, Ala. (19%, 500 combined jobs), Davenport-Moline-Rock Island, Iowa-Ill. (17%, 1,800 combined jobs) and Laredo, Texas (15%, 600 combined jobs). The largest job losses again occurred in Baton Rouge, La. (-4,900 construction jobs, -9%), followed by Charlotte-Concord-Gastonia, N.C.-S.C. (-3,100 combined jobs, -5%); Hartford-West Hartford-East Hartford, Conn. (-1,800 combined jobs, -9%); Silver Spring-Frederick-Rockville, Md. (-1,800 combined jobs, -5%) and Longview, Texas (-1,300 combined jobs, -9%). The largest percentage loss occurred in Watertown-Fort Drum, N.Y. (-10%, -200 combined jobs), followed by Hartford-West Hartford-East Hartford, Longview, Baton Rouge and Gulfport-Biloxi-Pascagoula, Miss. (-9%, -700 combined jobs). Construction employment reached a record high for July in 69 metros (dating back in most areas to 1990); five areas set a new July low.
The value of "new construction starts in July advanced 2%" at a seasonally adjusted annual rate from the rate in June, Dodge Data & Analytics reported on August 22. "This marked the third consecutive monthly increase for total construction starts, following gains of 10% in May and 9% in June. 'The strengthening volume of construction starts in recent months indicates that activity is moving closer to the levels reported in 2018, following a sluggish performance at the outset of 2019,' [Chief Economist Robert Murray commented]. 'Recent support has come from those construction sectors that are partially influenced by public funding, namely institutional building with its June gain and now public works with its July gain. This is typically what takes place during the latter stages of a construction expansion, which also helps to keep the initial stage of a broad-based slowdown to stay moderate. The current year has already seen a pullback for multifamily housing after a robust 2018, and single-family housing has not yet provided evidence that it can move beyond its extended plateau any time soon. The commercial building segment so far in 2019 has been mixed—office construction remains on track for a modest gain, but there's also been generally depressed activity for store construction and some slippage for hotel and warehouse starts.'"
"Builder and developer confidence in the multifamily market strengthened" in the second quarter [Q2] of 2019, the National Association of Home Builders (NAHB) reported on August 22, based on its quarterly Multifamily Market Survey. The Q2 "index readings are in line with current Census numbers, which show a strong gain in starts and lower vacancy rates....the majority of new production in the multifamily market—94% of 2+ unit construction in [Q2]—consists of rental units."
The American Council of Engineering Companies (ACEC) reported that its "Engineering Business Index (EBI) edged up 0.4 points to 62.6 in the Q2 2019 survey, the second consecutive quarterly increase. The Q2 score, however, is 3.3% below the five-year average of 64.7. The survey of 172 firm leaders was conducted from June 18 to July 3, 2019. The EBI measures engineering industry leader confidence about their firms and their markets. Any score above 50 signals positive market sentiment. Firm leaders reported that the business climate is better now than a year ago, but has worsened in the past three months, and they believe it will continue to decline over the coming year. Respondents...report backlogs are down from a year ago and three months ago but are confident that their backlog will grow over the coming year. In the public markets, respondents believe that five of the six tracked sectors will improve over the coming year. Expectations for the Environmental sector rose 7.6%, Buildings (up 5.0%), Transportation (up 2.8%), Education (up 3.2%), and Water and Wastewater (up 2.7%). The Health Care sector was flat. The private markets were mixed. Respondents have positive expectations for the Industrial/Manufacturing (up 3.6%), Education (up 2.2%) and Land Development sectors (up 2.2%), but are less optimistic about the Energy and Power (down 3.9%), Health Care (down 2.2%), and Buildings (down 1.5%) sectors."
"Construction cost increases were widespread in August..., recording the 34th consecutive month of increases," IHS Markit and the Procurement Executives Group reported on August 21. "Both the materials and equipment, and subcontractor labor indexes indicated continued price increases...Survey respondents reported increasing prices for 11 out of the 12 components within the materials and equipment sub-index. Furthermore, several categories within the diffusion index such as ready-mix concrete, wire and cable, alloy steel pipe and fabricated structural steel products increased relative to last month. Equipment categories such as transformers, turbines, pumps and exchangers also posted increasing prices; however, the index figure was lower compared to last month. Yet again, carbon steel pipe prices were flat....'Steel mills announcing price increases for hot rolled coil has put a temporary floor under carbon steel pipe prices; however, pipe prices did not decline to nearly the extent that hot rolled coil has over the past year, presenting some further downside potential,' said Amanda Eglinton, associate director, IHS Markit."