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Construction spending totaled $1.320 trillion at a seasonally adjusted annual rate in February, up 1.0% from the upwardly revised January estimate and up just 1.1% year-over-year (y/y) from February 2018, the Census Bureau reported today. Public construction spending jumped 3.6% for the month and 11% y/y. Of the three largest public segments, highway and street construction soared 9.5% for the month and 23% y/y; educational, 0.8% and 5.5%, respectively; and transportation, -2.0% and 3.5% (9.7% y/y for state and local airport construction and -1.3% for other public transportation—port, transit and passenger rail). Private nonresidential construction spending fell 0.5% for the month and inched up 0.1% y/y. Of the largest components, power rose 0.6% for the month and 1.4% y/y (-1.8% y/y for electric power and 11% for oil and gas pipelines and field structures); manufacturing, 0.9% and 3.4%, respectively; commercial, 0.8% and -6.6% (with retail categories down 9.3% y/y and warehouse up 6.2%); and office, -0.4% and 4.8%. Private residential spending rose 0.7% in February but declined 3.4% y/y. New multifamily construction slipped 0.4% for the month but climbed 7.5%, y/y; new single-family construction, -1.1% and -7.1%; and residential improvements, 3.6% and -1.5%. Census revised up the January improvements total by an unusually large $20 billion (11%). In addition, the agency stated, "The release of data for March 2019 on May 1, 2019, will include adjustments to the estimates for January 2019 forward to account for additional projects identified as eligible for inclusion in the sampling frame. Due to the lapse in federal funding from December 22, 2018 through January 25, 2019, annual revisions will be released later than normal. With the release of data for July 2019 on September 3, 2019, unadjusted data will be revised back to January 2013 and seasonally adjusted data will be revised back to January 2008." These annual revisions are usually released on July 1.
Construction employment, not seasonally adjusted, increased between February 2018 and February 2019 in 232 (65%) of the 358 metro areas (including divisions of larger metros) for which the Bureau of Labor Statistics (BLS) provides construction employment data, fell in 73 (20%) and was unchanged in 53, according to an analysis AGC released today. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gain again occurred in Phoenix-Mesa-Scottsdale (11,900 construction jobs, 10%), followed by Atlanta-Sandy Springs-Roswell (9,700 construction jobs, 8%) and the Dallas-Plano-Irving division (7,600 combined jobs, 5%). The largest percentage gain was in Monroe, Mich. (28%, 500 combined jobs), followed by St. Cloud, Minn. (19%, 1,000 combined jobs) and Chico, Calif. (18%, 700 combined jobs). The largest job loss was in the Anaheim-Santa Ana-Irvine division (-3,300 construction jobs, -3%), followed by San Jose-Sunnyvale-Santa Clara (-2,600 construction jobs, -5%) and Riverside-San Bernardino-Ontario, Calif. (-2,500 construction jobs, -2%). The largest percentage loss again occurred in Danville, Ill. (-20%, -100 combined jobs), followed by Niles-Benton Harbor, Mich. (-17%, -400 combined jobs). Employment hit a record high for February in 62 metros (dating back in most areas to 1990); two areas set a new February low.
Housing starts in February declined 8.7% at a seasonally adjusted annual rate from January and 9.9% y/y from February 2018, the Census Bureau reported on Tuesday. Multifamily (five or more units)starts soared 24% from a very weak January rate but decreased 5.4% y/y. Single-family starts plunged 17% from an elevated January level and declined 11% y/y. Residential permits dipped 1.6% for the month and 2.0% y/y. Multifamily permits slipped 2.9% for the month but increased 12% y/y. Single-family permits were unchanged for the month and down 7.3% y/y.
"The 2018 executive actual [base salary] increase came in at 4.1%," matching the 2017 average, construction data firm PAS reported today in its latest Construction Compensation Quarterly. "The projected 2019 executive increase is 3.8%, however, historically predictions are usually about .5% low, so year-end 2019 will most likely come in around 4.3% to 4.5%. For comparison, WorldatWork is projecting a 3.7% for construction executives and a 3.2% average increase for all executives."
On Friday, the Bureau of Labor Statistics issued annual estimates for occupational employment and wages in May 2018, including for 45 construction and related occupations. The 4.5 million construction trades workers earned a median hourly wage of $21.54, 15.9% more than the median ($18.58) for all 144.7 million employees in the survey. There were also 598,000 supervisors of construction and extraction workers (median: $31.36) and 278,000 construction managers (median: $44.89).
"Construction costs continued to increase in March" for the 29th month in a row, IHS Markit and the Procurement Executives Group reported on Wednesday. "Materials and equipment prices rose [from] February with price increases recorded in 10 of the 12 subcomponents. Survey respondents reported falling prices for fabricated structural steel and carbon steel pipe; all other categories ranging from turbines to transportation registered price increases. The sub-index for current subcontractor labor costs [increased from] February. Labor costs rose in all regions of the United States..."'U.S. construction labor markets remain incredibly tight and shortages are widespread—even firms that are willing to raise wages and offer bonuses are having trouble finding experienced workers,' said Emily Crowley, principal economist, pricing and purchasing, IHS Markit. 'The recent uptick in oil and gas activity is also creating additional strain on labor markets on the U.S. Gulf Coast.'"