"Today's jobs figures highlight the devastating impact current economic conditions are having on the construction industry. In June alone, construction employment declined by 79,000 jobs, seasonally adjusted, while over the past twelve months 992,000 construction workers have lost their jobs. Indeed, while overall unemployment is 9.7 percent (9.5 percent, seasonally adjusted), over 17.4 percent of construction workers are now unemployed. While there is little doubt that the stimulus has helped slow the decline, the fact remains the construction industry has many long, slow and difficult months ahead as the one trillion dollar construction market continues to suffer from declining state and local revenue, little demand for commercial or retail facilities and shrinking orders for new factories and facilities."

Seasonally adjusted nonfarm payroll employment decreased in May in 39 states and increased in 11 states and the District of Columbia, BLS reported today. Compared to May 2008, employment decreased everywhere except in North Dakota (+1.1%) and Alaska (no change). Seasonally adjusted construction employment rose in May in 18 states, fell in 31 plus D.C., and was unchanged in South Carolina. Compared to a year earlier, construction employment dropped in 48 states plus D.C., and climbed only in North Dakota, 4%, and Louisiana, 3%. The biggest 12-month percentage declines were in Arizona, -28%; Kentucky and Connecticut, -21% each; and Nevada and Tennessee, -20% each. (To prevent disclosure of data for industries with small employment totals, BLS presents construction combined with mining and logging in Tennessee, five other states and D.C.) BLS also posted data on metro-area employment, not seasonally adjusted. Of the 311 metro areas (including metropolitan divisions of large metros) with construction (or combined) data, construction employment rose in only nine, fell in 300 and was unchanged in two.

Clearing Confusion About Buy America, Reporting Requirements Could Help Speed Stimulus Funds, Slow Decline in Construction Employment, Top Construction Economist Concludes

The construction employment picture brightened slightly with 18 states adding construction jobs from April to May according to a new analysis of data released today by the Bureau of Labor Statistics (BLS). However, construction employment overall continued to decline, noted Ken Simonson, the chief economist for the Associated General Contractors of America.

The producer price index (PPI) for finished goods climbed 0.5%, not seasonally adjusted (0.2%, seasonally adjusted), in April but fell 5% over the 12 months since May 2008, the Bureau of Labor Statistics (BLS) reported on Tuesday. That was the largest one-year drop in 60 years. The PPI for inputs to construction rose for the month and decreased from 12 months ago for every type of construction: all construction industries, 0.6% and - 5.3%; highway and nearly street, 2.1% and -11%; other heavy, 0.8% and -10%; nonresidential buildings, 0.6% and -5.9%; multi-unit residential, 0.2% and -3.8%; and single-unit, 0.1% and -1.0%. The variations reflect disparities in the weights for PPIs for different materials. The PPI for diesel fuel jumped 4.4% for the month but was down -58% over 12 months; asphalt paving mixtures and blocks, 3.5% and 12%; concrete products, -0.1% and 2.1%; steel mill products, -2.7% and -24%; copper and brass mill shapes, 0.8% and -25%; plastic construction products, -0.1% and 1.7%; gypsum products, -2.4% and 4.2%; lumber and plywood, -0.9% and -14%. PPIs for new buildings and subcontractor types, the only indexes that attempt to include overhead, profit and labor costs, were mixed for the month but up over 12 months. The PPI for new industrial buildings was down -0.3% for the month but up 6.9% since May 2008; warehouses, -0.4% and 5.7%; schools, 0 and 11.5%; and offices, 0.3% and 6.4%. The PPI for nonresidential building work by concrete contractors rose 0.4% and 4.8%; roofing, 0 and 11%; electrical, -0.1% and 3.1%; and plumbing, 0.3% and 8.7%.

View AGC Chief Economist Ken Simonson's June 17 presentation on the outlook for construction activity, materials and labor.

AGC has compiled tables of PPIs for construction materials and segments as well as analysis. The data is from the Bureau of Labor Statistics monthly report and covers over 50 construction specific data series.

The value of nonresidential construction starts jumped 16% in May (not seasonally adjusted) but was down 6.2% for the first five months of 2009 compared to the same period in 2008, Reed Construction Data reported on Thursday, based on its own compilation of starts. Chief Economist Jim Haughey commented, "However, May starts were 20% below last December. The volume decline is greater than 20% because bid prices have inched lower and May is typically a seasonally stronger month than December. The May starts increase partly offsets an unusually weak April and does not signal that starts have moved to a rising trend. That is still many months away, near yearend. Expect a mix of monthly gains and losses for the balance of the year, with the average level of starts not significantly different from May. Credit problems promise more delays and cancellations for commercial buildings and strained budget balances promise cutbacks in public building construction later this year. Highway, bridge and water/sewer starts will be boosted as more stimulus contract work begins….The economic stimulus plan has directly funded a little more than 1% of the estimated $275 billion spent on construction, excluding housing, in 2009 through May. This includes: (1) the $1.5 billion reimbursed to states through early June for highway projects; (2) smaller federal reimbursements for other construction work; and (3) an allowance for construction work completed that has not yet been reimbursed."

More and more construction firms report winning stimulus contracts that are enabling them to add employees and avoid expected layoffs. But the stimulus money is not enough to overcome the fall in private and state and local-funded projects. Meanwhile, the Buy American provision in the American Recovery and Reinvestment Act (ARRA) threatens to undercut the job gains.

Construction Economist Ken Simonson Says Stimulus Keeps Declines From Being Even Worse, Helps Contractors Save Jobs, Hire and Plan to Expand

ARLINGTON, VA - Unemployment in the construction sector climbed to a "horrendous" 19.2 percent (not-seasonally adjusted) as an additional 59,000 construction workers lost their jobs in May according to new federal data, said construction economist Ken Simonson today.

The unemployment rate jumped to 9.4% in May, seasonally adjusted (9.1% not seasonally adjusted), from 8.9% in April and 5.5% in May 2008, the Bureau of Labor Statistics (BLS) reported today. Nonfarm payroll employment fell by 345,000 jobs, seasonally adjusted, about half the drop of recent months, and BLS estimated that losses for March and April combined were 82,000 smaller than had been reported last month. The decline in construction employment also moderated, to a loss of 59,000 jobs from an average twice as high in recent months. But the unemployment rate in construction rose to 19.2%, not seasonally adjusted, from 8.6% in May 2008. (BLS does not report seasonally adjusted unemployment rates by industry.) All construction job categories declined at double-digit rates over the past 12 months, including-for the first time-all three nonresidential categories. The 12-month losses totaled 990,000, or -14%, in construction, with declines of -16% in residential (specialty trade contractors, -16%; building, -17%), and -12% for nonresidential (specialty trade contractors, -13%; building and heavy & civil engineering construction, -10% each). Average hourly earnings rose to $22.66, seasonally adjusted, in construction, up 4.1% (94 cents) over 12 months, compared to $18.54 (+3.1% or 55 cents) for all private production workers.