Reshaping the Construction Industry

Most states add jobs but remain below peak; Dodge reports surge in startsEditor’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 increased in 38 states and the District of Columbia from November 2013 to November 2014 and decreased in 12 states, an AGC analysis of Bureau of Labor Statistics (BLS) data released last Friday showed. Texas added the most jobs (47,300 jobs, 7.7%), followed by California (40,800, 6.3%) and Florida (34,900, 9.1%). The largest percentage gains were in North Dakota (16%, 5,300 jobs), Utah (10%, 7,600) and Florida. The largest percentage losses occurred in West Virginia (-11%, -3,800 jobs), Mississippi (-7.9%, -4,200), New Jersey (-4.5%, -6,200), and Nebraska (-4.1%, -1,900). New Jersey lost the most jobs, followed by Arizona (-4,600, -3.7%), Mississippi and West Virginia. For the month, 26 states and D.C. added construction jobs, 22 states lost jobs, and Idaho and Missouri had no change. Only North Dakota, Oklahoma and Louisiana have topped pre-recession construction employment peaks. (BLS combines mining and logging with construction in D.C., Nebraska and five other states to avoid disclosing data for industries with few firms.)  

After more than thirty years in the construction industry, it’s time for me to step aside to make room for the next generation, and I must say I’m encouraged by what I see.As I look back at my career in the industry, I’ve witnessed a lot of change.  In the 1980s, when I worked for one of the top engineering and construction firms in the nation, we didn’t have recruitment issues.  We had projects valued at more than $500 million with thousands of employees, and when we needed more pipefitters, welders or other craft professionals, we mailed notices to all those in our database who had ever worked for us.  We could expect that within days our employment offices would be full and our project workforce needs met.  During that time, employees went from contractor to contractor depending on where the work was.  The pay and benefits were good and the pool of employees seemed endless.  

PPI falls in November as diesel price plunges; mixed moves foreseen for materials costsEditor’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 decreased 0.4%, not seasonally adjusted (-0.2%, seasonally adjusted), in November and increased 1.4% over 12 months, BLS reported Friday. AGC posted an explanation and tables 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. There are no indexes yet for other building types, or for residential or nonbuilding construction. The PPI for final demand construction, not seasonally adjusted, rose 0.1% in November and 2.2% over 12 months. The overall PPI for new nonresidential building construction—a measure of the price contractors say they would charge to build a fixed set of five categories of buildings—also climbed 0.1% for the month and 2.2% since November 2013.   

There’s almost nothing partisan or ideological about trying to stop companies from cheating taxpayers and their workers, which is exactly what happens when some firms misclassify their employees. As our readers know, worker misclassification happens when a company pretends its employees are subcontractors with the intent of avoiding payroll taxes and benefits like health insurance. Unions call it “payroll fraud.” Many of us just call it cheating, plain and simple.The fact that this is a bipartisan issue became extra clear this past week following our report on new efforts in the Texas Legislature to try to rein in the practice, which has rightly been called “a scourge” and “a cancer” in the construction industry. It happens in other industries as well but it is especially rampant in construction.Previous legislative attempts to deal with this in Texas have had mixed success. Now, a new bill has been filed in the Texas House.