New construction starts rose 5% in December, seasonally adjusted, McGraw-Hill Construction (MHC) reported on Friday, based on data it compiled. But, for all of 2009,"the 26% annual decline for construction starts was the steepest in at least the past 40 years," Robert Murray, vice president of economic affairs for MHC, said. "At the same time, the bottom for construction starts was reached in February, to be followed by an up-and-down pattern during 2009 which suggests that the transition has been made from steady decline to at least low-level stability. Single-family housing, while still remaining at a very low volume, began to show some improvement as 2009 progressed. Funding from the federal stimulus bill helped to produce gains for highways and bridges, as well as a pickup for a few project types such as courthouses. However, commercial building and multifamily housing registered particularly severe declines in 2009, and even the previously resilient institutional building sector lost momentum. Going into 2010, more improvement is expected for housing and public works, but commercial and institutional building will continue to be adversely affected by weak employment, tight bank lending, and the eroding fiscal health of states and localities." MHC said nonresidential building starts were unchanged in December but fell 33% for 2009 as a whole, with stores and shopping centers, + 52% and -42%; warehouses, 15% and -62%; hotels, -32% and -66%; offices, -15% and -37%; manufacturing, 143% and -66%; education, - 3% and 19%; healthcare, 8% and -36%; and public buildings, -60% and 10%. Residential building in December "edged up 1%" but tumbled 31% for the year, with single-family, 2% and -23%; and multifamily, 1% and -56%. Nonbuilding construction climbed 15% in December but slid 9% for the year, with highways "steady" and +5%; bridges, 23% and 10%; sewers, 31% and -16%; water supply, 17% and -15%; and electric utilities, 27% and -41%.

(more…)

EVERY STATE AND THE DISTRICT OF COLUMBIA LOST CONSTRUCTION JOBS DURING THE PAST YEAR, NEW DECEMBER EMPLOYMENT DATA FINDS

Mississippi tops list of Six States to Add Construction Jobs Between November and December 2009, Wyoming Had Largest Monthly Percentage Decline in Construction Employment 

For the first time since the start of the economic downturn, every state and the District of Columbia reported losing construction jobs over the past twelve months, according to a new analysis of state-by-state employment data released today.  The analysis, conducted by the Associated General Contractors of America, found few signs of a construction industry recovery with only six states reporting construction job increases between November and December 2009.

(more…)

Public agencies have been reporting for more than a year that they are paying less for school buildings and other facilities than they had been. But few governments seem to have stepped up their construction programs to take advantage of the price breaks.

(more…)

The producer price index (PPI) for finished goods was unchanged in December before seasonal adjustment (up 0.2%, seasonally adjusted) and up 4.4% from a year earlier, the Bureau of Labor Statistics (BLS) reported today. The PPI for inputs to construction industries, a weighted average of materials used in all types of projects plus items such as diesel fuel that are consumed during construction, rose 0.2% and 0.4%, respectively. For the first year since 2002, construction inputs rose less in price than the overall PPI or the consumer price index (CPI) for all urban consumers, which fell 0.2% in December, not seasonally adjusted, but rose 2.7% from a year ago. Despite the year-over-year moderation, some materials costs have begun to rise: copper and brass mill shapes, up 6.0% in December and 42% since December 2008; prepared asphalt and tar roofing and siding products, 5.2% and -3.4%, respectively; aluminum mill shapes, 2.1% and -7.5%; lumber and plywood, 2.0% and 0.5%; plastic construction products, 0.4% and -0.7%; and concrete products, 0.3% and -1.1%. In addition, the PPI for construction equipment climbed 0.1% and 0.9%. Two key input prices dropped for the month: diesel fuel, -5.0% and 22%; and steel mill products, -1.3% and -11%. Margins for contractors shrank, as indicated by a drop in the PPIs for new buildings and subcontractors' work on nonresidential buildings, which include overhead and profit as well as materials: industrial buildings, 0 and -4.3%; warehouses, 0.1% and -4.3%; schools, -0.1% and -2.4%; offices, -0.3% and -3.1%; concrete contractors, -0.1% and -1.3%; roofing, -0.1% and 0.6%; electrical, 0 and -3.1%; and plumbing, heating and air conditioning, 0 and 0.3%.

(more…)

NEW FEDERAL DATA SHOWS CONTRACTORS GETTING SQUEEZED BETWEEN RISING MATERIALS COSTS AND STAGNANT PRICES FOR FINISHED CONSTRUCTION

Latest Producer Price Index Figures Signal Need for Speedy Investments in Infrastructure Construction While Prices are Still Relatively Low, Construction Economist Notes

Construction contractors are being squeezed by rising materials costs and disappearing profit margins, based on analysis of the latest producer price index (PPI) conducted by the Associated General Contractors of America today.  The new figures show finished prices of nonresidential buildings dropped last year even though a number of construction materials prices have begun to increase in price, noted Ken Simonson, the association's chief economist.

(more…)

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

Conflicting data, media reports and politicians' assertions have spread a great deal of confusion about the stimulus legislation's impact, or lack of it, on job creation in construction. The reality is that the American Recovery and Reinvestment Act (ARRA) - the "stimulus bill" - has enabled contractors to hire some workers and keep paying others who would have been laid off. But ARRA's reporting requirements, which were supposed to add transparency, have actually added to the confusion.

(more…)

Nonresidential construction starts fell 8.2% in December, compared to December 2008, and 6.9% for all of 2009, compared to 2008, Reed Construction Data reported today, based on information it compiled. Building construction was down 27% for the month and 17% for the year. Starts on civil works (highways, bridges, water/sewage, dams/marine, airports and other) rose 27% and 16%, respectively. Chief Economist Jim Haughey commented, "Nonresidential building starts weakened in December after a strong November. Usually, there is a seasonal upturn in December so the 20% month-to-month decline is a significant weakening. There were relatively few starts of large developer-financed projects as well as a nearly 40% dip in hospital starts. Nonetheless, nonresidential building starts in December matched the monthly average for 2009. The December results for the civil market are distinctly different. December starts were unchanged from November and above the monthly average for 2009. Highway starts matched the November total. There was another large gain in water/sewer starts, likely the delayed impact of the stimulus program. The 20% jump in December pushed water/sewer starts to a record high level."

(more…)

NEARLY ONE IN FOUR CONSTRUCTION WORKERS ARE UNEMPLOYED AS INDUSTRY LOSES ANOTHER 53,000 JOBS IN DECEMBER

With Construction Unemployment Now at 22.7 Percent, No Time to Single Out Construction Industry For Higher Health Care Costs and Penalties, Trade Group Says 

 Deteriorating demand for construction services continued to drag on the economy as new federal figures show another 53,000 construction workers lost their jobs in December and the industry's unemployment rate climbed to 22.7 percent.  The new employment data underscores the need to rethink health care legislation that singles out small construction firms for new mandates and fees, the Associated General Contractors of America noted.

(more…)

Construction spending fell 0.6% in November to a seasonally adjusted annual rate (SAAR) of $900 billion, down 13% from November 2008 and the lowest total in six years, the Census Bureau reported on Monday. Private nonresidential spending was flat for the month but down 21% compared to a year earlier. Private power construction (power plants, renewable power, transmission lines, oil and natural gas facilities) climbed 2.7% for the month and 8.9% year-over-year. But the 10 other private categories posted steep year-over-year declines, ranging from manufacturing, 0.1% for the month, -7.0% for the year; to private office, -2.2% and -39%; commercial (retail, warehouse and farm), -1.0 and -41%; and lodging, -1.5% and -46%. Private residential spending fell 1.6% and 19%, the first time in several years that residential outperformed nonresidential over a 12-month span. New single-family construction increased for the sixth straight month, 1.3%, but was down 25% from a year earlier. New multi-family was off 4.1% and 44%, and improvements fell 3.9% and 2.8%. Public construction spending slipped 0.4% for the month but climbed 2.7% from November 2008. The two largest public categories were mixed: highway and street, -2.9% and 5.7%; and educational, -4.4% and 12%.

(more…)