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AGC's Data DIGest: June 17 – June 21, 2013

MoneyConstruction jobs rise in more states in May; year-to-date starts slip, MHC and Reed say

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In May, seasonally adjusted nonfarm payroll employment increased from a year earlier in 48 states and the District of Columbia and decreased in Alaska and Wyoming, the Bureau of Labor Statistics (BLS) reported today. Seasonally adjusted construction employment climbed in 32 states, fell in 18 states and the District of Columbia, and was flat in Idaho, an AGC analysis showed. Louisiana and North Dakota surpassed previous construction employment peaks, set in November 2008 and September 2012, respectively. The largest one-year percentage gains in construction jobs occurred in Arizona (10.4%, 11,900 jobs), Louisiana (9.4%, 11,800), Hawaii (9.3%, 2,700) and Connecticut (9.2%, 4,700). Texas added the most new construction jobs over the past 12 months (39,200, 6.7%), followed by California (38,500, 6.6%), Arizona and Louisiana. Montana lost the highest percentage (-9.7%, -2,300 jobs), followed by Rhode Island (-6.3%, -1,000). Illinois lost the most jobs (-6,200, -3.3%), followed by North Carolina (-6,000, -3.5%). From April to May, seasonally adjusted construction employment rose in 27 states, fell in 20 plus D.C. and was unchanged in Connecticut, Rhode Island and West Virginia. (BLS combines mining and logging with construction in D.C., Hawaii and five other states to avoid disclosing data about industries with few employers.)

Data on construction starts collected separately by McGraw Hill Construction (MHC) and Reed Construction Data show a drop in the first five months of 2013 compared with January-May 2012 but differ on details. “New construction starts in May advanced 5% from the previous month” at a seasonally adjusted annual rate, MHC reported on Thursday. “During the first five months of 2013, total construction starts on an unadjusted basis were… down 3% from the same period a year ago. The 2013 year-to-date volume for total construction reflected a steep decline in the dollar amount for new electric utility projects relative to a robust first half of 2012. If electric utilities are excluded, total construction starts would be up 10% year-to-date, helped in particular by the strengthened pace for housing,” up 32% year-to-date. Nonresidential building construction dropped 8% year-to-date and nonbuilding construction, including utilities, plunged 29%. Reed reported on Wednesday that nonresidential building starts climbed 8.4% year-to-date, while heavy engineering (nonbuilding) starts fell 24%, for a combined drop of 4.6%. (Reed data exclude residential starts and are not seasonally adjusted.)

Housing starts increased 6.8%, seasonally adjusted, from April to May and 29% over the past 12 months, the Census Bureau reported on Tuesday. Single-unit starts increased 0.3% and 16%, respectively. Multi-unit (5+ units) starts rose 25% and 69%. Building permits slipped 3.1% for the month but climbed 21% year-over-year, with single-unit permits rising 1.3% and 25%, respectively; and multi-unit, -11% and 14%. “Unusually wet weather across much of the country likely dampened the pace of single-family production in May,” National Association of Home Builders Chief Economist David Crowe said in a release. “Nevertheless, the strength in permit issuance for single-family units--and stockpiling of permits for future use--provides further evidence that housing continues on a slow and steady path to recovery.” Wells Fargo Economics commented, “Multifamily permits have bounced all over the place the past three months but are still running 14.9% ahead of their first quarter pace. The volatility may be a sign that the run-up in multifamily construction is moderating. Demand for apartments remains exceptionally strong but supply is rapidly catching up with demand in some markets, which may be leading to a bit more skittishness on the part of developers and lenders….Multifamily starts have also been running well below permits over the past few months, suggesting that apartment building will ramp up further this summer.”

Construction of rail and barge terminals to handle crude oil from Texas, North Dakota and Canada is growing, partly at the expense of crude-oil pipeline construction. In a June 6 presentation to an Argus Petroleum conference in Houston, Kevin Sterling of BB&T Capital Markets cited these examples: “In May, Louisiana Governor Bobby Jindal announced that Wolverine Terminals plans to invest $30 million to build a new petroleum terminal….Crude oil is expected to be delivered to the site by rail and then blended and shipped by barge to domestic refiners. [Indigo Resources is considering] the construction of a new rail-to-barge terminal near Osceola, Ark. [In April, Marquis Energy] announced plans to expand terminal operations in Caruthersville, Mo….Expansion includes floating dock dedicated to transloading of crude from rail cars (BNSF) to tank barges, effectively doubling the throughput capacity….Kinder Morgan plans to construct a new barge dock which the company believes will help relieve current barge congestion in the Houston Ship Channel….Jefferson Refinery is expanding the Port [of Beaumont, Tex.]’s crude oil terminal facility for short term barge shipments. [Plains All American] plans to build out marine terminal at the Viola Barge Dock in Corpus Christi….Tesoro/Savage recently announced joint venture to develop and operate a new 120,000 barrel/day rail-to-barge transloading facility at Port of Vancouver, Wash.” On June 3, Kinder Morgan announced it would not build its proposed Freedom pipeline from Texas to California because prospective customers said they were getting enough crude delivered by rail and barge.

The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved. Sign up at www.agc.org/datadigest.


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