NATIONAL ASSOCIATION UNVEILS CONSTRUCTION RECOVERY PLAN AS CONSTRUCTION EMPLOYMENT DECLINED IN 324 CITIES THIS AUGUST

Tax Credits, Incentives, Policy Changes and New Infrastructure Investments Designed to Jumpstart Construction Activity, Employ Thousands, Boost Broader Economic Recovery

SPARKS, NEVADA - The Associated General Contractors of America unveiled a new plan today designed to revive the hardest hit sector of the economy, the nation's construction industry.  The plan, "Build Now for the Future: A Blueprint for Economic Growth," is designed to reverse predictions that construction activity will continue to shrink through 2010, crippling broader economic growth.

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The rate of decline in overall employment is gradually slowing. First-time unemployment claims dropped in mid-September, suggesting that September employment losses will shrink again, as they did in August.

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"Information received since the Federal Open Market Committee [FOMC] met in August suggests that economic activity has picked up following its severe downturn," the Committee opined today. "Conditions in financial markets have improved further, and activity in the housing sector has increased….With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time." Consequently, the FOMC voted unanimously to stick with current monetary policy.

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CONSTRUCTION EMPLOYMENT DECLINES IN 48 STATES IN AUGUST COMPARED TO LAST YEAR AS INDUSTRY CONTINUES TO SUFFER

Nevada and Connecticut Experience Largest Declines and 41 States Experience Double-Digit Job Losses; Only North Dakota & Louisiana Add Construction Jobs During the Past Year

Construction employment saw significant declines in all but two states this August compared to last year according to an analysis of new state-by-state employment figures released today by the federal government.  The analysis, conducted by the Associated General Contractors of America, however did show that the number of states gaining construction jobs increased slightly in August compared to July 2009.

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The producer price index (PPI) for finished goods rose 1%, not seasonally adjusted (1.7%, seasonally adjusted) in August, but dropped 4.3% over 12 months, the Bureau of Labor Statistics reported today. The PPI for inputs to construction industries climbed 1.1% for the month but fell 7.4% from August 2008. Three items accounted for much of the up-and-down movement: the PPI for diesel fuel jumped 17% for the month but fell 41% over 12 months; steel mill products, 6.8% and -36%; and copper and brass mill shapes, 11% and -14%. PPIs for finished nonresidential buildings, which are intended to capture contractors' labor, overhead and profits as well as materials costs, rose for warehouses, 0.1% for the month and 1.4% over 12 months; offices, 0.2% and 2.9%; schools, -0.5% and 7.3%; and industrial buildings, -0.2% and 0.1%. But these indexes are based on contractors' estimates for hypothetical projects, not actual competitive bids, and may not reflect the deep discounting that contractors and owners alike report is occurring on projects.
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"Reports from the 12 Federal Reserve Districts indicate that economic activity continued to stabilize in July and August," the Fed reported on September 9 in the latest Beige Book, a summary of informal soundings of business conditions. The districts are referred to by the name of their headquarters city. "Relative to the last report, Dallas indicated that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond, and San Francisco mentioned signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis, and New York generally described economic activity as stable or showing signs of stabilization; St. Louis remarked that the pace of decline appeared to be moderating. Most Districts noted that the outlook for economic activity among their business contacts remained cautiously positive."

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CONSTRUCTION COST TREND REMAINS NEGATIVE DESPITE AUGUST INCREASES, TOP CONSTRUCTION ECONOMIST NOTES

Latest Producer Price Index Figures Point to 'Limited-Time Sale' For Construction Services

Despite increases in construction costs in August, new figures released today by the U.S. Bureau of Labor Statistics indicate that prices for the sector remain significantly down from a year ago, the chief economist for the Associated General Contractors of America said today in analyzing the data. 

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Nonfarm payroll employment fell by 216,000 and the unemployment rate climbed to 9.7% in August, seasonally adjusted (9.6%, not seasonally adjusted), the Bureau of Labor Statistics (BLS) reported on Friday. The job drop overall was the smallest in a year, but construction employment fell 65,000, close to the average for the past three months. That decline accounted for 30% of the overall job loss, even though construction is only 5% of total payroll employment. Over the past year, construction shed 1,084,000 jobs (15% of its August 2008 total), nearly one-fifth of all jobs lost. For the fourth straight month, the 1.1% decline in nonresidential employment (nonresidential building, specialty trade contractors and heavy and civil engineering construction) exceeded the 0.9% drop in residential employment (residential building and specialty trades). The unemployment rate for construction workers was 16.5%, double the 8.2% rate of a year earlier and higher than any other industry. (Industry unemployment rates are not seasonally adjusted.) Architectural and engineering services employment, a harbinger of demand for nonresidential construction, dropped by 5,000, seasonally adjusted, half the monthly average over the past 12 months. Average hourly earnings in construction rose 3 cents to $22.66 in August, seasonally adjusted, a 12-month gain of 2.9%, compared to 2.6% for all private production or nonsupervisory employees.

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

CONSTRUCTION WORKERS ACCOUNT FOR ALMOST ONE-THIRD OF ALL JOBS LOST THIS AUGUST AS INDUSTRY REMAINS THE HARDEST HIT

Nonresidential Construction Continues to Account for Larger Share of Job Losses than Residential Construction According to New Analysis by Top Construction Economist

Construction workers nationwide continued to bear the brunt of the recession, accounting for almost one-third of jobs lost this August, according to an analysis of new construction employment figures released today by the U.S. Bureau of Labor Statistics.  The new figures underscore how the current economic climate is having a disproportionate impact on the construction industry, the Associated General Contractors of America's economist noted.

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