Construction employment, not seasonally adjusted, rose year-over-year (y/y) from April 2023 to April 2024 in 218 (61%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 100 (28%), and was unchanged in 40, according to an analysis AGC released on Wednesday. (For most metros, BLS reports only combined totals for mining, logging, and construction; AGC treats these totals as construction-only.) Baton Rouge, La. added the largest number of jobs (7,600 construction jobs, 13%), followed by Las Vegas-Henderson-Paradise (6,500 construction jobs, 8%); Atlanta-Sandy Springs-Roswell (5,700 construction jobs, 4%); and the Fort Worth-Arlington, Texas division (5,100 combined jobs, 6%). Fairbanks, Alaska again had the largest percentage gain (32%, 700 construction jobs), followed by three areas with 20% increases: the Detroit-Dearborn-Livonia division (4,900 combined jobs); Anchorage, Alaska (1,900 construction jobs); and Lawton, Okla. (300 combined jobs). The largest job loss occurred in Denver-Aurora-Lakewood (-5,700 combined jobs, -5%), followed by New York City (-5,400 combined jobs, -4%); the Chicago-Naperville-Arlington Heights division (-3,900 construction jobs, -3%); Minneapolis-St. Paul-Bloomington, Minn.-Wis. (-3,800 combined jobs, -5%); and Baltimore-Columbia-Towson, Md. (-3,800 combined jobs, -5%). The largest percentage decrease occurred in Augusta-Richmond County, Ga.-S.C. (-12%, -2,000 combined jobs), followed by Columbus, Ind. (-11%, -200 combined jobs); Bellingham, Wash. (-10%, -900 combined jobs); and Decatur, Ill. (-9%, -300 combined jobs).
“National economic activity continued to expand from early April to mid-May; however, conditions varied across industries and districts,” the Federal Reserve reported on Wednesday in its latest Beige Book, which “characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each district’s sources….Conditions in the commercial real estate sector softened amid supply concerns, tight credit conditions, and elevated borrowing costs….Many districts observed a continued increase in input costs, particularly insurance, while some noted price declines in certain construction materials.” AGC posted construction excerpts from each district.
In contrast, a contractor in Texas forwarded letters from several paving-materials suppliers announcing price increases, effective July 1. Readers are invited to send price and supply available information to ken.simonson@agc.org.
Rents for five types of income-producing property rose on average across 54 metro areas in the first quarter (Q1) of 2024 relative to Q4 and Q1 2023 while occupancy was mixed, the Mueller Real Estate Market Cycle Monitor reported on Tuesday. Rents and occupancy are major determinants of construction demand for these categories. The national office market occupancy level fell 0.2% in Q1 and 1.3% y/y. “Declining demand continues as office-using job growth was below 1% and the tenants signing new leases are taking an average 15% less space than pre-pandemic. Sublease space is now four times more than during the Great Recession. We expect occupancy to continue its decline as 50% of leases signed pre-pandemic have yet to expire. Total U.S. negative net absorption is now over 200 million square feet. Asking [office] rental rates were up 0.2% in [Q1 and 0.8% y/y]—but growing concessions continue to depress net effective rents.” Industrial occupancies fell 0.4% in Q1 and 2.7% y/y. “Demand growth was slow…Some distributors were also closing facilities that they had opened post-pandemic. Net absorption was…the lowest rate in a decade. A large amount of unleased space also came online. Asking rent growth was up 1.2%” in Q1 and 4.7% y/y. The national apartment occupancy average fell 0.4% in Q1 and 1.1% y/y. “Many Sunbelt markets saw rents decline due to large new supply.” The national average apartment rent growth rose 0.2% in Q1 and 1.0% y/y. Retail occupancies were flat nationally in Q1 and rose 1.9% y/y, “maintaining the highest peak-occupancy in history. Only San Francisco had an occupancy decline. Half of new demand was driven by start-ups, discount/off-price, and food & beverage tenants..., with freestanding retail having the highest occupancy rates. Demand was up 42 million square feet [y/y] with 250 million square feet of total leasing. New supply was 40% below the long-term average and 155 million square feet of retail have been demolished since the start of COVID, further restricting supply. Most new supply was either single-tenant build-to-suit or ground floor space in a mixed-use project. National average retail asking rents were up 0.7% for the quarter and were up 2.8%” y/y. Hotel occupancies rose 0.4% and 1.6%, respectively. National average revenue per available room (RevPAR) was up 1.1% and 4.1%.
