New construction starts dropped 9% in November, seasonally adjusted, McGraw-Hill Construction (MHC) reported on December 16, based on data it compiled. "Nonresidential building retreated after October's elevated activity, and nonbuilding construction (public works and electric utilities) also settled back. Meanwhile, residential building in November held steady with its October pace," MHC reported. Through the first eleven months of 2009, total starts fell 28% from the same period a year ago. "November's pullback following the strong gain in October is a continuation of [a recent up-and-down] pattern," Robert Murray, MHC's vice president of economic affairs, said. "Accordingly, even with the November decline, the evidence of recent months suggests that overall construction activity has at least stabilized at a low level. Single family housing is no longer exerting a downward pull, and the federal stimulus act to this point has supported greater construction of highways, bridges, river/harbor development, and courthouses. At the same time, the negatives of weak employment, tight bank lending, and diminished state fiscal health continue to depress most of the nonresidential building structure types as well as multifamily housing."

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Two indicators released in mid-December suggest construction has started to thaw in a few parts of the country. On December 17, the Bureau of Economic Analysis reported that although seasonally adjusted personal earnings in construction shrank nationally in the third quarter, construction earnings were positive in North Dakota, Alaska and New Hampshire and were unchanged in New Jersey.

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26 STATES ADD CONSTRUCTION JOBS DURING UNUSUALLY MILD NOVEMBER, BUT ONLY NORTH DAKOTA SEES ANNUAL INCREASE

Too Early to Know if Trend is Emerging As Kansas and Nebraska See Largest Increase;Vermont and Washington See Largest Decrease in Monthly Construction Employment

Construction employment increased in 26 states this November during a period of warm, dry weather according to an analysis of new employment data released today by the Bureau of Labor Statistics.  The analysis conducted by the Associated General Contractors of America, however, found construction employment decreased everywhere except North Dakota over the past 12 months.

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The producer price index (PPI) for finished goods spurted 1.2% in November, not seasonally adjusted (1.8%, seasonally adjusted), and 2.4% over 12 months, the Bureau of Labor Statistics (BLS) reported on Tuesday. A jump of 7% in the PPI for crude petroleum drove up both the finished-goods and construction indexes. Even aside from the oil-price leap, construction materials costs appear to have ended their slide, as shown by recent three-month trends. The PPI for inputs to construction industries, a weighted average of the cost of all materials used in residential and nonresidential construction plus items consumed by contractors, such as diesel fuel, climbed 0.6% for the month and was unchanged over three months despite falling 2.3% compared to November 2008. Inputs that contributed to these diverse 1-, 3- and 12-month patterns include the PPIs for diesel fuel (up 6.3% for the month, 6.4% over three months and down 3.7% over 12 months); copper and brass mill shapes (4.6%, 11.3% and 26%); steel mill products (-1.6%, 4.1% and -20%); aluminum mill shapes (0, 1.3% and -12%); insulation materials (0.3%, 0.6% and -1.4%); and lumber and plywood (1.1%, -0.1% and -2.9%). Materials that have continued to drop in price include gypsum products (-0.5%, -3.6% and -8.2%); asphalt paving mixtures and blocks (-0.3%, -1.0% and -16%); and concrete products (-0.1%, -0.6% and -1.2%).

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

NEW DATA SHOWS LOW CONSTRUCTION PRICES MAY SOON BE COMING TO AN END AS DIESEL, PLYWOORD AND COPPER PRICES JUMP IN NOVEMBER

Monthly Change in Prices a 'Warning Shot' that Low Prices Likely to End Soon, Top Construction Economist Says 

New federal data released today showing sharp increases in the prices of key construction materials like diesel, copper and brass mill shapes likely foreshadow future increases in construction costs, the Associated General Contractors of America announced today.  The new November producer price index (PPI) report from the Bureau of Labor Statistics provide the strongest indication yet that construction prices are heading up, the association noted.

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The employment report that the Bureau of Labor Statistics released on December 4 contains tentative good news. The unemployment rate fell from 10.2 percent in October to 10 percent in November, seasonally adjusted. Job losses fell to 11,000, the lowest monthly decline since the recession began in December 2007.

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CONSTRUCTION UNEMPLOYMENT NEARS 20 PERCENT AS ANOTHER 27,000 CONSTRUCTION WORKERS LOSE THEIR JOBS IN NOVEMBER

Eighty-Six Percent of Job Losses Come From Non-Residential Construction Sector Though Good Weather Likely Contributed to Fewer Job Losses Than in Previous Months 

Despite a slowing in the number of construction workers losing jobs in November, 19.4 percent of the nation's construction workers are now unemployed according to new federal figures released today.  The figures show that unemployment rates within the construction industry remain significantly higher than any other sector of the economy, the Associated General Contractors of America said.

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Reports from the 12 Federal Reserve districts indicate that "economic conditions have generally improved modestly since the last report" six weeks ago, the Fed wrote on Wednesday in the Beige Book, a summary of informal soundings of business conditions, in which districts are referred to by the names of their headquarters cities. "Eight districts indicated some pickup in activity or improvement in conditions, while the remaining four-Philadelphia, Cleveland, Richmond, and Atlanta-reported that conditions were little changed and/or mixed. As for commercial real estate and construction: "Market conditions were reported to have weakened in virtually all districts, with rising vacancy rates, downward pressure on rents, and little, if any, new development. Expectations for 2010 were also quite low. Boston characterized the commercial real estate outlook as 'bleak,' Dallas noted that construction was at 'historically low levels,' and Kansas City described the sector as 'distressed.' Still, some districts noted scattered signs of encouragement: Cleveland and Chicago referenced public-works projects as a source of increased business, Richmond noted signs of increased leasing activity from the health and education sectors, Atlanta indicated a modest pickup in new development projects, Minneapolis noted some recently started hotel and retail development, and San Francisco cited slight improvement in availability of financing for new development."

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NONRESIDENTIAL CONSTRUCTION SPENDING DROPS TO LOWEST RATE IN 27 MONTHS AS COMMERICAL ACTIVITY AND ROAD BUILDING DECLINE

Stimulus Delays, Lack of Highway Bill Are Adding to Construction Industry Woes Caused by Declining Private-Sector Activity, Industry Economist Notes 

Spending on nonresidential construction activity tumbled 1.5 percent in October, seasonally adjusted, to the lowest annual rate since July 2007, according to a new analysis of Census Bureau data conducted by the Associated General Contractors of America.  The data showed that nonresidential construction spending slumped to $652 billion, an 11 percent decline compared to October 2008, the association added.

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