AGC released estimates on Tuesday of the impact of construction investment on jobs, gross domestic product (GDP) and personal earnings for the U.S. and each state (www.agc.org/stimulus). The estimates show that $1 billion of infrastructure spending supports $3.4 billion of GDP, $1.1 billion of personal earnings and 28,500 jobs. Approximately 9,700 (34%) are direct construction jobs; 4,600 are indirect jobs in supplier industries (mining, manufacturing and services); and 14,300 (50%) are induced jobs resulting from purchases out of the additional income of workers and owners in the directly and indirectly supported industries. The ratios are drawn from a model prepared for the Federal Highway Administration, which found similar impacts for federal-aid highway spending. State totals are based on an analysis of each state’s share of total construction employment and spending for AGC by Prof. Stephen Fuller of George Mason University. State impacts are smaller, especially for small states, since not all purchases of supplies or induced spending occurs within the state. The NAIOP Foundation recently released a similar analysis by Fuller that focused on office, warehouse, retail and industrial building construction (www.naiop.org/foundation/contdev.pdf).

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AGC released new nationwide and state-by-state data that shows clear economic benefits of infrastructure stimulus investments.

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 producer price index (PPI) for finished goods dropped 2.9% before seasonal adjustment (-2.2%, seasonally adjusted) in November, and rose only 0.4% from November 2007, the Bureau of Labor Statistics (BLS) reported on Friday. The PPI for inputs to construction industries fell 3.2% for the month but was 4.9% higher than in November 2007. The segment with the largest decline for the month was highway and street construction, -6.6% and 3.7% year-over-year; followed by other heavy construction, -4.8% and 4.0%; nonresidential buildings, -3.3% and 4.2%; multi-unit residential buildings, -1.9% and 4.5%; and single-unit residential, -1.3% and 6.2%. PPIs for several construction materials declined sharply for the month and year: diesel fuel, -20% and -24%; copper and brass mill shapes, -11% and -19%; aluminum mill shapes, -3.8% and -1.1%; and lumber and plywood, -2.0% and -6.0%. Other prices have come down but not to year-ago levels: steel mill products, -9.0% and 21%; asphalt paving mixtures and blocks, -0.5% and 45%; and plastic construction products, -1.1% and 5.5%. Items that rose in price in November and over 12 months included construction machinery and equipment, 1.1% and 5.1%; concrete products, 1.0% and 4.6%; gypsum products, 0.7% and 6.4%; and insulation materials, 0.6% and 0.6%. PPIs for finished buildings (including labor, profit and overhead) showed little movement for the month: new industrial buildings, -0.1% and 7.5%; new warehouses, 0 and 6.3%; new schools, 0.2% and 8.2%; and new offices, 0.3% and 6.3%. PPIs introduced in July for subcontractors’ nonresidential building work (new, repair and maintenance) rose 0.6% in November for concrete contractors, 0.3% for roofing and 0.1% for electrical and plumbing.

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AGC’s Chief Economist appeared on Bloomberg’s In Focus December 8 to discuss the need to invest in the nation’s infrastructure and the industry’s ability to put people to work immediately.

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Organizations representing state and local officials have been adding to lists of infrastructure projects they say would be started quickly if they receive federal funds. Today, the U.S. Conference of Mayors released an 800-page update of its November 14 list of local projects that are "ready to go," saying, "In this second installment, 427 cities reported a total of 11,391 infrastructure projects costing a total of $73 billion that would create 847,641 jobs." On Friday, the American Association of State Highway Transportation Officials (AASHTO) reported, "More than 5,000 'ready to go' projects worth $64 billion were identified in a new AASHTO survey of all 50 state transportation departments plus the District of Columbia. These transportation infrastructure projects could be under contract within six months if Congress includes them in an economic stimulus bill. They would support an estimated 1.8 million American jobs if the funding were made available."

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December 2, 2008 presentation on the 2008-09 outlook for construction activity, materials and labor.

Construction spending fell 1.2% from September to October, to a seasonally adjusted annual rate of $1.07 trillion, the Census Bureau reported today. However, Census bumped up its estimates for September and August by more than $20 billion (2%) each, enough to improve the estimate for third-quarter gross domestic product. Private residential spending in October was down 3.5% from September and 24% from October 2007. Private nonresidential spending fell 0.7% for the month but rose 9.1% from a year before. Public spending climbed 0.7% and 7.4%. Several major nonresidential categories rose in October: office construction 1.6% (and 8.9% compared to a year before); commercial (retail, warehouse and farm), 1.3% ( -11% from October 2007); education, 1.1% (9.5%); manufacturing, 1.0% (54%); and lodging, 0.6% (18%). Health care construction was unchanged for the month (up 3.9% from a year earlier). Declining categories included highway and street construction, -0.8% (up 5.8% from October 2007) and power, -6.0% (22%).

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