Construction employment declined in 333 metropolitan areas in June compared to June 2008, rose in 10 and was unchanged in nine, according to an AGC compilation, released today, of data from the Bureau of Labor Statistics. (Data for most metros combines logging and mining with construction.) The only metro areas with job gains greater than 100 were Columbus, Indiana, 600 jobs or 32% (combined); Weirton, West Virginia-Steubenville, Ohio, 500 or 17% (combined); Baton Rouge, 2,100 or 5% (construction only); Tulsa, 400 or 2% (construction only); and Odessa, Texas, 200 or 2% (combined). The largest percentage losses were in Pascagoula, Mississippi, -2,400 or -36% (combined); Reno-Sparks, Nevada, -5,800 or -33% (construction only); Duluth, Minnesota-Superior, Wisconsin, -2,800 or -31% (combined); and Redding, California, -1,300 or -31% (combined). Losses totaled 10% or more in 206 of the 352 areas, including divisions of large metros.

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The value of nonresidential construction starts in June "decreased 71% from May, more than offsetting the 27% increase the previous month," Reed Construction Data Chief Economist Jim Haughey reported on Thursday, based on Reed's compilation of starts. "Every construction category declined significantly in June….The May-June boom/bust is substantially random. Nonetheless, the slim starts total reported for June does signal that nonresidential construction is entering the weakest period in this business cycle. But by itself, June was not as grim as the starts total suggests….The 22% year-to-date decline is a better indicator of the trend for the rest of the year than the 71% June decline. The current bid calendar suggests that much of the June drop will be reversed in the next few months."

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Construction workers continued to bear the pain of steep job losses almost everywhere in June, as construction employment rose only in North Dakota (by 5 percent) and Louisiana (4 percent), compared to June 2008, according to new data released by the Bureau of Labor Statistics (BLS). Jobs disappeared in the remaining 48 states and the District of Columbia, with losses as great as 26 percent in Arizona, 23 percent in Nevada, 22 percent in Connecticut and 20 percent in Tennessee, noted Ken Simonson, the chief economist for the Associated General Contractors of America.

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The producer price index (PPI) for finished goods jumped 1.8% in June, seasonally adjusted (1.9%, not seasonally adjusted), but was still down 4.6% from the June 2008 level, the Bureau of Labor Statistics reported today. The PPI for inputs to construction industries, a weighted average of materials used in all types of construction plus items consumed by contractors (such as diesel fuel)  rose 1.0% for the month, not seasonally adjusted, but dropped 6.0% over 12 months. Diesel, which soared 15% for the month but plunged 55% over 12 months, influenced the PPIs for various segments according to the relative importance of the fuel as an input. Thus, the PPI for inputs to highway and street construction climbed 3.0% and fell 11%; other heavy construction, 1.4% and -11%; nonresidential buildings, 0.9% and -6.6%; multi-unit residential, 0.5% and -4.6%; and single-unit, 0.2% and -2.0%. Other key materials showed divergent patterns: concrete products, 0.1% and 1.9%; asphalt paving mixtures and blocks, -0.6% and 2.7%; steel mill products, -0.7% and -38.5%; copper and brass mill shapes, 6.0% and -17.5%; aluminum mill shapes, 0.2% and -24%.

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View AGC Chief Economist Ken Simonson's July 14 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.

Developer-financed construction is shriveling. The latest monthly figures from the Census Bureau on construction spending show big downturns in May from April and from May 2008 in categories that typically rely heavily on bank financing. (The percentages are calculated from numbers that are seasonally adjusted, to account for normal month-to-month variation.)

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Nonfarm payroll employment shrank by 467,000 jobs in June, seasonally adjusted, bringing the 12-month total loss to 5,664,000 (-4.1%), the Bureau of Labor Statistics (BLS) reported on Thursday. The unemployment rate rose to 9.7%, not seasonally adjusted (9.5%, seasonally adjusted). Construction again had the highest industry unemployment rate, 17.4%, not seasonally adjusted, up from 8.2% a year earlier. Construction job losses totaled 79,000(-1.3%) in June, seasonally adjusted, and 992,000 (-14%) over 12 months. All construction job categories had severe monthly and 12-month losses: residential building, -10% and -16%; residential specialty trade contractors, -1.4% and -16%; nonresidential building, -1.6% and -11%; nonresidential specialty trades, -0.9% and -13%; and heavy and civil engineering, -1.8% and -11%. Architectural and engineering services employment, a portent of future construction, fell 1.0% for the month and 7.9% over 12 months. Seasonally adjusted average hourly earnings totaled $22.59 in construction, up 82 cents (3.8%) over 12 months, compared to $18.53, a gain of 49 cents (2.7%) for all private production and nonsupervisory employees.

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"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."

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