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Construction employment, not seasonally adjusted, increased between November 2017 and November 2018 in 265 (74%) of the 358 metro areas (including divisions of larger metros) for which BLS provides construction employment data, fell in 45 (13%) and was unchanged in 48, according to an AGC analysis posted on Thursday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gains again occurred in Houston-The Woodlands-Sugar Land (24,000 construction jobs, 11%), Phoenix-Mesa-Scottsdale (17,500 construction jobs, 15%), the Dallas-Plano-Irving metro division (14,800 combined jobs, 10%), Orlando-Kissimmee-Sanford (11,100 construction jobs, 15%) and Atlanta-Sandy Springs-Roswell (9.100 construction jobs, 7%). The largest percentage gains occurred in Weirton-Steubenville, W.Va.-Ohio (26%, 500 combined jobs), followed by New Bedford, Mass. (22%, 600 combined jobs) and Lewiston, Idaho-Wash (21%, 300 construction jobs). The largest job loss was in St. Louis, Ill.-Mo. (-4,500 combined jobs, -7%), followed by Baltimore-Columbia-Towson (-3,000 combined jobs, -4%) and the Middlesex-Monmouth-Ocean, N.J. sub-division (-2,400 combined jobs, -6%). The largest percentage loss again occurred in Laredo, Texas (-10%, -400 combined jobs), followed by Portland-South Portland, Maine (-9%, -900 combined jobs) and Spokane-Spokane Valley, Wash. (-8%, -1,100 combined jobs). Employment was at a record high for November in 81 metros (dating back in most areas to November 1990); three areas set a new November low.
The partial shutdown of federal agencies may affect the advertising, award and payment processing of federal construction projects. The federal-aid highway program and the Departments of Defense, Veterans Affairs and Energy, among others, are either not subject to annual appropriations bills or were covered by bills enacted in September. But only "essential employees" are allowed to work at many other agencies. Publication of regulations and data releases, such as the construction spending report scheduled for January 3, will be delayed. However, firms should continue filing any data, tax or other mandated reports on schedule. Readers are invited to submit any examples of how the shutdown has affected them to firstname.lastname@example.org.
Construction compensation survey and consulting firm PAS reported today, based on its survey of "over 165 companies..., contractors are projecting construction support staff wage increases to average 3.4% by yearend," very consistent with the 3.3-3.5% increases in 2013-2017. Benefit programs were "improved" by 31% of respondents' firms and reduced by 2% of firms. "Voluntary benefits (health, retirement, paid time off, etc.) average approximately 25% of payroll," nearly identical to the percentage from 2002 on. "Similar to most of past four to six years, 20% [of respondents' firms pay 100% of health insurance] for the employee and 8% pay 100% for dependents." The deductible portion of healthcare policies increased 20% for employees since the 2014 survey, to $1,753, while the deductible for family coverage increased 15%, to $3,688. Over that period, annual out-of-pocket limits increased 22% for employees, to $4,477, and 25% for family coverage, to $9,186.
Economic consultancy IHS Markit forecasted on November 1, "Wages in the construction industry will continue to move higher, with lower-skilled workers experiencing the strongest growth. Minimum wage increases on both coasts are helping to increase the floor for unskilled wages. Average construction wages will grow 3.2% in 2018 [up from 2.6% in 2017], compared with 2.0% for skilled workers. Slowing nonresidential fixed investment combined with an influx of less-productive workers will keep skilled wages subdued in 2018. However, expect stronger demand in nonresidential spending in 2019 and 2020 to fuel an acceleration in skilled wages." The firm forecasts 3.7% wage growth in 2019 for both total and skilled workers in construction.
"Construction cost increase[s] continued to slow in December," IHS Markit and the Procurement Executives Group (PEG) reported on Wednesday. December was the 24th month in a row with higher costs. "Although prices are still rising ...increases have been less widespread in the last two months.Materials and equipment prices rose in December, however the index figure dropped once again [and] has not been this low since July 2017. Price increases were recorded in six of the 12 subcomponents in December; heat exchangers, turbines and ready-mix concrete showed flat pricing; while fabricated structural steel, carbon steel pipe and alloy steel pipe experienced price declines. Steel and pipe pricesbegan to drop after a 15-month stretch of rising prices....Current subcontractor labor price increases were also not widespread in December."
Modular residential construction remains a small niche and has not expanded recently. The National Association of Home Builders reported, in its November 13 Eye on Housing blog, "approximately 2% of multifamily buildings (properties, not units) were built using modular and panelized methods. Similarly to single-family construction, this market share is expected to grow, but it was also larger in years past. In the year 2000, 5% of multifamily buildings were constructed with modular (1%) or panelized construction methods (4%). It is worth noting that the market share of 50+ unit apartment unit construction was considerably lower in 2000 (14%) than in 2017 (52%)." As for single-family construction, "For 2017, there were 26,000 total single-family units built using modular (12,000) and panelized/pre-cut (14,000) construction methods, out of a total of 795,000 [single-family homes completed. This] 3.3% market share for 2017 represents a decline from years prior to the Great Recession. In 1997 and 1998, 7% of single-family completions were modular (4%) or panelized (3%). This marked the largest share for the 1992-2017 period."