Editor’s note: Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.
Seasonally adjusted construction employment rose in 45 states and the District of Columbia year-over-year (y/y) from September 2017 to September 2018, declined in three states and held steady in Maryland and Missouri, an AGC analysis of Bureau of Labor Statistics data released today showed. The largest increases in construction jobs during the past year occurred in two states hit by hurricanes in September and August 2017, respectively: Florida (70,700 jobs, 15%) and Texas (60,200, 8.5%), followed by California (32,900, 4.0%), Georgia (22,300, 12%) and Arizona (16,000, 11%). Florida also had the highest percentage increase in construction employment during the past year, followed by Georgia, Arizona, Nevada (10%, 8,400) and New Hampshire (9.7%, 2,600). Construction employment set a new high in Colorado, Massachusetts, New York, Oregon and Texas. Of the three states that shed construction jobs between September 2017 and September 2018, New Jersey again lost the most and highest percentage (-9,600 jobs, -6.1%), followed by Kentucky (-900, -1.2%) and Missouri (-200, -0.5%). For the month, employment rose in 29 states and D.C., declined in 17 states and was flat in Alaska, Iowa, Louisiana and North Dakota. Pennsylvania added the most jobs for the month (3,700 jobs, 1.5%), followed by Texas (3,000, 0.4%) and Georgia (2,900, 1.5%). Kentucky had the largest monthly percentage gain (2.2%, 1,700 jobs), followed by Oklahoma (1.6%, 1,200) and Connecticut (1.6%, 1,000). Michigan lost the most construction jobs in September (-2,100, -1.2%), followed by California (-2,000, -0.2%), New Jersey (-1,500, -1.0%), Washington (-1,400, -0.7%) and Kansas (-1,400, -2.3%). Kansas had the steepest percentage job loss for the month, followed by Michigan, Mississippi (-1.1%, -500) and New Jersey. (AGC's rankings are based on seasonally adjusted data, which in D.C., Maryland and five other states is available only for construction, mining and logging combined.)
The value of new construction starts in September fell 5% at a seasonally adjusted annual rate, following declines of 9% each in July and August, construction data provider Dodge Data & Analytics reported on Thursday. "Through the first nine months of 2018, total construction starts on an unadjusted basis were...down 1% from the same period a year ago. The year-to-date volume for total construction starts was dampened by a 49% plunge for the electric utility/gas plant category. If the electric utility/gas plant category is excluded, total construction starts during the first nine months of 2018 would be up 1% compared to the same period last year....Nonresidential building year-to-date dropped 7%, as a 15% increase for manufacturing plant construction was outweighed by declines of 6% for commercial building and 11% for institutional building. (...The [YTD] performance for nonresidential building is expected to strengthen during this year's closing months.) Nonbuilding construction [YTD] slipped 4%, as a 7% increase for public works was countered by a 49% slide for electric utilities/gas plants.Residential building was the one major sector to see a [YTD] increase, rising 6% with single-family housing up 7% and multifamily housing up 5%." Chief economist Robert Murray commented, "'It's true that the rate of growth for construction starts has decelerated more in 2018, but it's still too early to say that the construction industry has rounded the peak and is now in decline. There are of course mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by stronger economic growth, some easing of bank lending standards, still healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works.'"
Housing starts slumped 5.3% from August to September but increased 3.7% y/y, the Census Bureau reported on Wednesday. The YTD total for January-September combined, not seasonally adjusted, was 6.4% higher than a year ago. Single-family starts slipped 0.9% for the month but increased 4.8% y/y and 6.0% YTD. Multifamily starts—an often volatile indicator—tumbled 13% for the month but climbed 4.5% y/y and 7.3% YTD. Building permits dipped 0.6%, seasonally adjusted, from August to September and 1.0% y/y but rose 4.1% YTD. Single-family permits climbed 2.9% for the month, 2.4% y/y and 5.6% YTD. Multifamily permits decreased 9.3% for the month and y/y but inched up 0.8% YTD.
Freddie Mac reported on Wednesday, "The latest 'Profile of Today's Renter' reveals that...58% of renters believe that renting is a good choice for them now and do not have plans to buy a home at this time—up from 54% in February. Over the last three years there has been a gradual increase in the number of renters who are not interested in buying. This quarter shows a small increase in this trend, with 23% of renters reporting they have no interest in buying a home—up from 20% in February. In addition, 42% of baby boomers have expressed no interest in owning a home. A total of 66% of renters plan to continue renting for their next residence—up 11 points from February. Consistent with this view, fewer renters (41%) believe buying a home will be equally or more affordable in the next 12 months—down from 46% in February." Although a high percentage of all rental properties are single-family, the overwhelming majority of residential rental construction is multifamily.
Data DIGest is a weekly summary of economic news. All rights reserved. Sign up at http://store.agc.org. Editor: Ken Simonson, Chief Economist, AGC, simonsonk@agc.org
