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AGC's Data DIGest: December 20-22, 2023

Industry job totals rise in November in 34 states; Dodge reports starts plunge 15% to 10-month low

Seasonally adjusted construction employment rose from November 2022 to November 2023 in 34 states and the District of Columbia, fell in 14 states, and held steady in Alaska and West Virginia, according to AGC’s analysis of data the Bureau of Labor Statistics (BLS) posted today. Texas added the most construction jobs (35,700 or 4.5%), followed by California (33,800, 3.7%), Florida (13,700, 2.2%), and Kentucky (12,000 jobs, 14%). The largest percentage increases again occurred in Kentucky and Arkansas (12%, 7,700), followed by South Dakota (11%, 2,900). New York lost the most jobs (-6,300, -1.6%), followed by Missouri (-4,700, -3.4%) and Washington (-4,600, -1.9%). North Dakota again experienced the largest percentage loss (-8.2%, -2,200 jobs), followed by Missouri. Construction employment rose in November in 28 states, fell in 19 states and D.C., and was flat in Alaska, Georgia, and Louisiana. Texas added the most jobs over the month (9,200, 1.1%), followed by California (6,500, 0.7%). Oklahoma had the largest percentage gain (2.7%, 2,300 jobs), followed by Nevada (2.4%, 2,700 jobs). (For D.C., Delaware, and Hawaii, BLS posts combined totals for mining, logging, and construction; AGC treats the changes as all from construction.) 

Total construction starts in current dollars fell 15% in November from October to the lowest seasonally adjusted annual rate in 10 months, Dodge Construction Network reported on Wednesday. Nonresidential building starts tumbled 29%. “Manufacturing starts plummeted 74% following several strong project starts in October. Commercial starts fell 19% with office buildings being the only category to see a gain. Institutional starts rose 7% due to a significant uptick in healthcare activity.” (Office includes data centers.) Nonbuilding starts dipped 2%. “Highway and bridge starts decreased 8%, environmental public works starts fell 4%, utility/gas starts rose 17%, and miscellaneous nonbuilding starts improved by 1%.” Residential building starts fell 6%. Single-family starts inched up 1%, while multifamily starts slumped 19%.

The National Association of Home Builders reported on Thursday, “NAHB analysis of the Census Bureau’s quarterly state and local tax data shows that $129 billion in taxes were paid by property owners in the third quarter [Q3] of 2023 (not seasonally adjusted). In the four quarters ending Q3 2023, state and local governments collected $757 billion of property tax revenue—an 11.6% increase over Q3 2022. The year-over-year growth rate of property tax revenue (trailing four-quarter total) has climbed from 1.7% to 11.6% since Q1 2022. Growth has exceeded 10% for three consecutive quarters for the first time since 2009. Gains have been driven by rising home value assessments, which can lag market prices by one to two years.” New and upgraded residential and commercial properties also add to the property tax base. Rising property tax receipts are a positive sign for funding construction by school districts and other local agencies, either directly or as backing for bond issues.

The Architecture Billings Index (ABI) registered a score of 45.3, seasonally adjusted, in November, up from 44.3 in October, “indicating slightly fewer firms reporting a decline in billings,” the American Institute of Architects (AIA) reported on Wednesday. AIA calls the index “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. Thus, any score below 50 means more firms reported decreased billings than increased billings, compared to the month before. “‘This marks the seventh month in 2023 with a decline in billings. Over the past three months this pace of decline has accelerated, with firms in all specializations and in all regions of the country reporting weakening business conditions,’ said [AIA Chief Economist Kermit Baker]. ‘However, with signs that credit conditions are beginning to ease, firms are reporting an uptick in inquiries for future projects.’” Readings for practice specialties (based on three-month averages) were all below 50 but had mixed changes from October: institutional, 46.6 (down from 47.8); commercial/industrial, 45.7 (up from 44.5); mixed practice, 42.7 (down from 43.8); and residential (mainly multifamily), 42.1 (unchanged). The design contracts index also was below 50 but increased from 46.5 in October to 48.1. 

Note: AGC’s offices will be closed Dec. 25-Jan. 1. The next issue of the DIGest will be sent on Jan. 5. 

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