Ken Simonson's blog

Employment jumps in February; "Momentum" looks positive for building, power projects

Nonfarm payroll employment in February increased by 235,000, seasonally adjusted, from January and by 2,350,000 (1.6%) year-over-year (y/y), the Bureau of Labor Statistics (BLS) reported today. The unemployment rate dipped to 4.7% from 4.8% in January. Construction employment (6,881,000) increased by 58,000 from the upwardly revised January total to the highest level since November 2008 and rose by 219,000 (3.3%) y/y. The monthly increase was the largest since March 2007 and probably reflected exceptionally mild weather in much of the U.S. in February. There was an increase of 15,100—the largest for February since 1996—in heavy and civil engineering construction employment, which is likely more affected than building or specialty trade contractors by winter weather. Average hourly earnings in construction increased 2.7% y/y to $28.48, or 9.2% higher than the average for all private-sector employees ($26.09, a y/y gain of 2.8%).   [node:read-more:link]

Construction spending, starts stumble in January; Beige Book finds 'modest' growth

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.

Construction spending totaled $1.180 trillion at a seasonally adjusted annual rate in January, a decrease of 1.0% from the December rate but a 3.1% year-over-year (y/y) gain from the January 2016 rate, the Census Bureau reported on Wednesday. Private residential spending in January increased 0.5% for the month and 5.9% y/y. New multifamily construction increased 9.0% y/y; new single-family construction rose 2.3% y/y; and residential improvements rose 11% y/y. Private nonresidential spending was unchanged from December but climbed 8.9% y/y.    [node:read-more:link]

Construction starts soar in January, Dodge says; airport projects take off; ABI slips

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.

The value of construction starts jumped 12% from December to January at a seasonally adjusted annual rate, Dodge Data & Analytics reported on Wednesday. "After losing momentum during last year's fourth quarter, nonresidential building strengthened in January, with much of the lift coming from the start of the $3.4 billion Central Terminal Building at LaGuardia Airport in New York [LGA] as well as groundbreaking for several other large airport terminal projects."    [node:read-more:link]

Construction input costs outpace new building PPIs; more price hikes appear imminent

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.

The producer price index (PPI) for final demand in January, not seasonally adjusted, increased 0.5% from December and 1.6% year-over-year (y/y) from January 2016, the Bureau of Labor Statistics (BLS)  reported today. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, climbed 0.3% for the month and 1.3% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—rose 1.4% y/y. Changes ranged from 0.8% y/y each for industrial and school building construction to 0.9% for health care buildings, 1.9% for office buildings and 2.0% for warehouses. PPIs for new, repair and maintenance work on nonresidential buildings ranged from 0.8% y/y for electrical contractors to 0.2% for plumbing contractors, 2.0% for roofing contractors and 4.1% for concrete contractors. The index for inputs to construction—excluding capital investment, labor and imports—comprises a mix of 59% goods (including 5% for energy) and 41% services (including trade services, 26%; transportation and warehousing, 4%; and other services, 10%).    [node:read-more:link]

Employment rises in January; spending slips in December; recent pay trends are mixed

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.

Nonfarm payroll employment in January increased by 227,000, seasonally adjusted, from December and by 2,343,000 (1.6%) year-over-year (y/y), the Bureau of Labor Statistics (BLS) reported today. The unemployment rate inched up to 4.8% from 4.7% in December. Construction employment (6,809,000) increased by 36,000 from the upwardly revised December total to the highest level since November 2008 and rose by 170,000 (2.6%) y/y. Average hourly earnings in construction increased 3.2% y/y to $28.52, or 9.7% higher than the average for all private-sector employees ($26.00 a y/y gain of 2.5%).   [node:read-more:link]

Employment rose in 32 states in 2016; materials costs climb; yearend Dodge starts slip

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 32 states from December 2015 to December 2016 and fell in 18 states and the District of Columbia, an AGC analysis of Bureau of Labor Statistics (BLS) data released on January 23 showed. Nevada again led in percentage gain (15%, 11,000 jobs), followed by Oregon (9.0%, 7,600), Iowa (8.3%, 6,900), Minnesota (8.0%, 9,300), Washington (7.6%, 13,500) and Colorado (7.0%, 11,000). Florida  added the most jobs (22,300 jobs, 5.1%), followed by California (20,900, 2.8%), Washington, Nevada and Colorado. Illinois lost the most jobs (-9,700 jobs, -4.5%), followed by New York (-7,800, -2.1%), Alabama (-6,100, -7.4%) and Kentucky (-5,000, -7.4%). Alabama and North Dakota (-7.4%, -2,400 jobs) had the steepest percentage loss, followed by Kansas (-6.8%, -4,200) and Kentucky.    [node:read-more:link]

ConstructConnect, ABI, Beige Book signal positive, but mixed, outlook for starts

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.

The value of nonresidential construction starts decreased 5.6%, not seasonally adjusted, year-over-year (y/y) from December 2015 to December 2016 but increased 6.8% for the full year, data provider ConstructConnect reported on Tuesday. Nonresidential building starts (66% of the total) slipped 2.3% y/y but expanded by 11% for the full year. Commercial building starts dipped 1.7% y/y but added 11% for the year; institutional building starts, -3.9% y/y and +12% for the year; and the small industrial building starts segment, +0.3% y/y and -13% for the year. Heavy engineering (civil) starts (34% of the total) fell 12% y/y but only 0.5% for the year. The largest subsegments, in descending order of 2016 size, were school/college, down 9.7% for the year; road/highway, up 1.6%; water/sewage, up 6.8%; and retail/shopping, up 25%.

The Architecture Billings Index (ABI) score in December soared to 55.9, seasonally adjusted, the highest one-month reading since July 2007, and a large leap from November's mark of 50.6, the American Institute of Architects reported on Wednesday. The ABI measures the percentage of surveyed architecture firms that reported higher billings than a month earlier less the percentage reporting lower billings; any score over 50 indicates billings growth. [node:read-more:link]

Contractors are upbeat about 2017 markets; job growth slows as openings soar

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.

Contractors are optimistic, on balance, about the 2017 outlook for nonresidential and multifamily construction, based on the 1,281 responses to a survey that AGC released on Tuesday. About 46% expect the available dollar volume of projects they compete for in 2017 to be higher than in 2016, while 9% expect the volume to be lower, for a net positive reading of 36%. The net reading was positive for all 13 market segments included in the survey, the net was highest for hospital and retail, warehouse and lodging construction, at 23% each; followed by private office, 20%; manufacturing, 18%; highway and public building, 15% each; higher education, K-12 school and water/sewer, 14% each; multifamily and other transportation, 11% each; power, 10%; and federal construction, 7%.    [node:read-more:link]

Construction spending hits 10-year high; apartments and warehouses remain hot

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.

Construction spending totaled $1.182 trillion at a seasonally adjusted annual rate in November, an increase of 0.9% from the October rate and 4.1% year-over-year (y/y) from the November 2015 rate, the Census Bureau reported on Tuesday. The rate was the highest since April 2006. Private residential spending increased 1.0% in November and 3.0% y/y. New multifamily construction slumped 2.7% for the month but increased 11% y/y; new single-family construction gained 1.8% from October but declined 0.9% y/y; and residential improvements rose 1.5% for the month and 6.8% y/y. Private nonresidential spending climbed 0.9% for the month and 6.4% y/y. By subsegment, in descending order of November size, power (electric power plus oil and gas pipelines and field structures) edged up 0.5% for the month and 1.5% y/y; commercial (retail, warehouse and farm) added 0.3% for the month and 12% y/y; manufacturing skidded 1.1% in November and 8.0% y/y; office jumped 1.9% in November and 31% y/y to an all-time high; and health care fell 0.2% in November and 2.6% y/y.   [node:read-more:link]

Fewer metros post job gains; nonresidential starts are mixed; ABI hugs breakeven level

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.

Construction employment, not seasonally adjusted, increased from November 2015 to November 2016 in 211 (59%) of the 358 metro areas (including divisions of larger metros) for which the Bureau of Labor Statistics (BLS) provides construction employment data, decreased in 86 (24%) and was stagnant in 61, according to an AGC release and map on Tuesday. (BLS combines mining and logging with construction in most metros.) The number of areas with increases was the lowest for November since 2012. The largest percentage gains again occurred in Boise, Idaho (21%, 4,000 combined jobs), followed by El Centro, Calif. (17%, 600 combined jobs), Albany, Ore. (16%, 400 construction jobs) and Weirton-Steubenville, W. Va.-Ohio (16%, 300 combined jobs). As in October, Denver-Aurora-Lakewood (9,600 combined jobs, 10%) and Orlando-Kissimmee-Sanford (9,600 construction jobs, 15%) tied for the most jobs added; they were followed by Seattle-Bellevue-Everett (8,100 construction jobs, 9%) and Las-Vegas-Henderson-Paradise (7,900 construction jobs, 15%). The largest job losses again were in Houston-The Woodlands-Sugar Land (-12,700 construction jobs, -6%), followed by the Los Angeles-Long Beach-Glendale division (-4,400 construction jobs, -3%) and Orange-Rockland-Westchester, N.Y. (-3,400 combined jobs, -8%).    [node:read-more:link]