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AGC's Data DIGest: December 17-21, 2018

Employment rises in 42 states, D.C.; population growth slows; starts data are mixed

Editor’s note: Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Seasonally adjusted construction employment rose year-over-year (y/y) from November 2017 to November 2018 in 42 states and the District of Columbia, declined in seven states and was unchanged in Rhode Island, an AGC analysis of Bureau of Labor Statistics data released today showed. Texas added the most construction jobs over the year (47,100 jobs, 6.5%), followed by Florida (32,900, 6.4%), California (29,600, 3.6%), Arizona (18,500, 12%) and Georgia (18,200, 9.7%). Wyoming added the highest percentage of new construction jobs during the past year (15%, 2,900 jobs), followed by Arizona, Nevada (12%, 9,900), North Dakota (11%, 2,900), Connecticut (11%, 6,400) and Oregon (11%, 10,500). Construction employment set a record high in four states: Nebraska, New York, Oregon and Texas. Missouri had the largest job loss (-3,100 jobs, -2.7%), followed by South Carolina (-3,100, -3.0%) and New Jersey (-2,200, -1.4%). Hawaii had the steepest percentage decline (-3.8%, -1,400), followed by South Carolina, Missouri and New Jersey. Construction employment increased from October to November in 23 states, decreased in 22 and held steady in five plus D.C. (AGC's rankings are based on seasonally adjusted data, which in D.C., Hawaii, Nebraska and four other states is available only for construction, mining and logging combined.)

On Wednesday, the Census Bureau released state population and migration estimates for July 1, 2018, and slight revisions for 2010-17. U.S. population totaled 327.2 million, a gain of 0.62% (2.0 million) from July 1, 2017, just below the 2016-17 increase of 0.64% (2.1 million) and the slowest since 1937. AGC posted rankings for all states and D.C. Nevada grew the fastest, 2.1% (up from 1.8%, 3rd-fastest in 2017); followed by Idaho, 2.1% (vs. 2.1%, 1st in 2017); Utah, 1.9% (2.0%, 2nd); Arizona, 1.7% (1.5%, 6th) and Florida, 1.5% (1.7%, 5th). Most states had growth (or loss) rates close to 2017 rates. The biggest positive changes in growth rate occurred in Wyoming (from -0.9% in 2017 to -0.2% in 2018), North Dakota (from 0.1% to 0.6%) and Nevada. The largest increases again were in Texas (379,000), Florida (323,000) and California (158,000). Arizona added 19,000 more residents than it had added in 2017; Pennsylvania, 9,000 more. Nine states lost population, vs. 10 in 2017. New York lost the most residents (-49,000, -0.2%); for the fifth time in six years, West Virginia had the largest percentage loss (-0.6%, -11,000). California again had the biggest slowdown in population growth, adding 33,000 fewer residents than in 2017. The steepest percentage slowdowns were in D.C. (from 1.3% in 2017 to 1.0% in 2018), Washington (from 1.8% to 1.5%) and Montana (from 1.2% to 0.9%). In a commentary, Wells Fargo Economics discussed the varying reasons for differences among states (births vs. deaths, domestic or international migration) and noted, "Slowing population growth was primarily the result of fewer births, while a modest pick-up in international migration provided some support. Fewer residents moved within the U.S." Growth rates and changes in rates over time affect demand for various types of construction as well as state and local revenues to fund work.

The value of new construction starts in November slid 7% at a seasonally adjusted annual rate from October's "elevated rate," construction data provider Dodge Data & Analytics reported on December 20. "Most of the total construction decline in the latest month was the result ofnonresidential building pulling back 15% after its 43% surge in October....The other two major construction sectors witnessed slightly reduced activity in November, with residential building down 1% and nonbuilding construction down 2%. During the January-November period of 2018, total construction starts on an unadjusted basis were...up 1% from a year ago. Excluding the electric utility/gas plant category, which fell 30% year-to-date [YTD], total construction starts in the first 11 months of 2018 were up 2%" (residential, 6%; nonresidential, -2%; nonbuilding, -3%).

The Architecture Billings Index (ABI) exceeded the breakeven 50 mark for the 14th month in a row in November, with a seasonally adjusted score of 54.7, up from 50.4 in October, the American Institute of Architects reported on Wednesday. The ABI measures the percentage of surveyed architecture firms that reported higher billings than a month earlier, less the percentage reporting lower billings; scores over 50, on a 0-100 scale, suggest billings increased overall. Scores by practice specialty (based on three-month moving averages) all topped 50 for the fifth-straight month: 53.8 each for mixed practice (up 1.2 from October) and commercial/industrial (up 2.8); multifamily residential, 51.2 (down 0.2); and institutional, 50.8 (down 2.1).

Housing starts increased 3.2% from October to November but decreased 3.6% y/y, Census reported on Tuesday. Starts rose 5.1% YTD through November, not seasonally adjusted. Single-family starts slumped 4.6% for the month and 13% y/y but rose 3.9% YTD. Multifamily starts—an often-volatile indicator—jumped 25% for the month, 20% y/y and 7.8% YTD. Building permits climbed 5.0%, seasonally adjusted, for the month, 0.4% y/y and 4.2% YTD. Single-family permits rose 0.1% for the month and 5.2% y/y but dipped 1.9% YTD. Multifamily permits rose 15% for the month, 5.5% y/y and 2.1% YTD.

Distributor New South Construction Supply reported on Thursday in its monthly e-newsletter, "Multiple manufacturers of construction products announced price increases taking effect in late December and [early in 2019]. The sustained shortage of drivers and available trucks is putting a strain on the nationwide supply chain, and as a result, transportation costs are continuing to increase across the board. The rise in raw material costs from current tariffs [also is] mentioned as [a reason] for announced price increases...Ames Industrial, a leading supplier of tools and equipment, has announced a price increase effective February 1, 2019. Their main reasons behind the price increase are freight and driver shortage issues, increasing labor costs, packing material increases and the pending tariff increase set for January 1. Increases range from 4% to almost 20%."

Data DIGest is a weekly summary of economic news. All rights reserved. Sign up at http://store.agc.org. Editor: Ken Simonson, Chief Economist, AGC, simonsonk@agc.org