CONSTRUCTION EMPLOYMENT SHRINKS IN 325 OF THE NATION'S 337 LARGEST METRO AREAS IN SEPTEMBER, PHOENIX LOSES MOST JOBS
Indiana's Columbus and Anderson See Largest Percent Increase, while Reno, NV and Kokomo, IN see Largest Percent Decrease in Construction Employment 

ARLINGTON, VA - All but 12 communities nationwide saw declines in construction employment between September 2008 and 2009 according to a new analysis of metropolitan area employment data from the Bureau of Labor Statistics released today by the Associated General Contractors of America. That analysis found more construction jobs were lost in Phoenix, AZ (35,100) than in any other city in America.

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"Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels," the Fed reported on Wednesday in the Beige Book (so named for the color of its cover), a summary of informal soundings of business conditions conducted in each district from late August to October 12. "Leading the more positive sector reports among districts were residential real estate and manufacturing, both of which continued a pattern of improvement that emerged over the summer….Districts generally reported little or no increase to either price or wage pressures, but references to downward pressures were occasionally noted. While upward price pressures were generally subdued in most districts, materials prices increased in Cleveland (mainly for steel) and Kansas City. [Districts are named for their headquarters cities.] Residential construction activity remained weak in most districts….Commercial real estate continued to weaken across the 12 districts, although even this sector had scattered bright spots. Each district indicated that demand for private commercial real estate was weak, with New York, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, Kansas City, and San Francisco all characterizing activity as declining further since the last report. An inability to obtain credit was often cited as a problem for businesses that wanted to purchase or build space. High vacancy rates were noted as a key concern especially for landlords who were not offering concessions. And, while industrial real estate in the Richmond District was generally weak, renewed interest by retailers to revisit postponed expansion plans was also noted. Finally, public nonresidential construction activity funded by federal stimulus projects was a source of strength in the Cleveland, Chicago, Minneapolis, and Dallas districts, but gains were often offset by state and local government cutbacks."

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CONSTRUCTION EMPLOYMENT DECLINES IN 49 STATES & DC IN SEPTEMBER COMPARED TO LAST YEAR AS INDUSTRY AWAITS STIMULUS, RECOVERY

Nevada and Arizona Experience Largest Declines and 41 States Experience Double-Digit Job Losses; Only Louisiana Adds Construction Jobs During the Past Year 

Construction employment again declined in large numbers in all but one state this September 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, also found that the number of states gaining construction jobs from August to September 2009 declined after increasing during the two previous months.

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PRODUCER PRICE INDEX FIGURES SHOW LIMITED-TIME CONSTRUCTION COSTS SALE COMING TO AN END, TOP CONSTRUCTION ECONOMIST SAYS

September Data Shows Costs for Most Construction Materials Higher with Copper, Aluminum and Steel Seeing "Significant" Increases 

Construction costs, which had been relatively low for much of the past year, are beginning to climb at an increasing rate, signaling the end to the "limited-time" sale for construction, according to a new analysis of the latest producer price index released by the U.S. Bureau of Labor Statistics today. 

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"The level of construction starts in 2010 is expected to climb 11%," McGraw-Hill Construction (MHC) forecasted on Frday, "following the 25% decline predicted for 2009. 'The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39% from its mid-decade peak,' said Robert Murray, vice president of economic affairs…'The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types. With continued improvement expected for single family housing, after reaching bottom earlier this year, the overall level of construction activity should see moderate expansion in 2010.'" MHC predicted, "Single-family housing for 2010 will advance 32% in dollars, corresponding to a 30% increase in the number of units to 560,000 (McGraw-Hill Construction basis). Multifamily housing will improve 16% in dollars and 14% in units, after steep reductions in 2008 and 2009. Commercial buildings will drop 4% in dollars, following a steep 43% drop in 2009. The weak employment picture will further depress occupancies, making it even more difficult to justify new construction. Institutional buildings will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2% after sliding 23% this year. The dollar amount of construction for this sector will edge up 1%, helped by a growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings. Manufacturing buildings will drop 14% in dollars and 3% in square feet, hampered by the substantial amount of slack manufacturing capacity. Public works construction is expected to rise 14%, given more wide-ranging strength across all project types. Electric utility construction will slip 3%, continuing to settle back after a record high in 2008."

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The American Recovery and Reinvestment Act-the stimulus legislation that President Obama signed in February-contained 61 separate programs with money for construction, by AGC's count, with a wide range of administering agencies, formulas and rules. Not surprisingly, there is a lot of variation in how quickly the agencies have awarded the money. Here are some glimpses I saw in a week of presentations in early October.

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New orders for U.S. manufactured goods (excluding semiconductor manufacturing) fell 0.8% in August, seasonally adjusted, after four consecutive monthly increases, the Census Bureau reported on Friday. Orders for construction materials and supplies rose 0.6% in August, following increases of 0.8% in July and 1.7% in June. Orders for construction machinery, a normally volatile series, tumbled 23% in August after gains of 9.6% in July and 11.5% in June.

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Seasonally adjusted nonfarm payroll job losses in September totaled 263,000, barely half the average of the last 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. (Seasonal adjustment takes into account normal monthly variations in weather and numbers of work days.) But construction, particularly nonresidential, continued to hemorrhage jobs. Construction lost 15% of its September 2008 jobs in the last 12 months, compared to 4% for the entire nonfarm economy. September losses totaled 51,000 in nonresidential building, specialty trade, and heavy and civil engineering construction combined, nearly the monthly average loss of 54,000 over the past 12 months. Residential building and specialty trade contractors shed a combined 13,000 jobs in September, barely a third as many as the monthly average over the 12-month span. One faintly positive sign was that architectural and engineering services employment, a harbinger of future demand for construction, rose for the first time in 15 months, albeit by only 500 jobs (0.04%). Average hourly earnings in construction tumbled 16 cents to $22.45 in September, bringing the 12-month change to 36 cents or 1.6%, compared to 2.5% for all private-sector production or nonsupervisory employees. The overall unemployment rate climbed to 9.5% in September, not seasonally adjusted (9.8%, seasonally adjusted) from 6.0% a year earlier. The unemployment rate in construction, 17.1%, not seasonally adjusted, again topped every other industry and was up from 9.9% a year earlier.

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CONSTRUCTION UNEMPLOYMENT RISES TO 17.1 PERCENT AS ANOTHER 64,000 CONSTRUCTION WORKERS LAID OFF IN SEPTEMBER

One out of Every Five Construction Workers Lost Job since December 2007, Nonresidential Construction Accounted for 80 Percent of Construction Jobs Lost Last Month

The national unemployment rate for the construction industry rose to 17.1 percent as another 64,000 construction workers lost their jobs in September, according to an analysis of new employment data released today.  With 80 percent of layoffs occurring in nonresidential construction, Ken Simonson, chief economist for the Associated General Contractors of America, said the decline in nonresidential construction has eclipsed housing's problems.

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NEW MEASURES NEEDED TO STEM CONSTRUCTION CRISIS AS NEW FIGURES SHOW DECLINE IN NONRESIDENTIAL CONSTRUCTION SPENDING

August Data Shows Fourth Consecutive Drop, in Contrast to Housing Rebound

New figures showing an almost 5 percent increase in spending on single-family homebuilding and residential improvements mask the fourth consecutive monthly slide in nonresidential construction, a leading industry economist said today.  Ken Simonson, chief economist for the Associated General Contractors of America, noted that spending on nonresidential construction projects declined in August by $3 billion, bringing the cumulative drop since August 2008 to $34 billion or 4.7 percent.

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