The producer price index (PPI) for finished goods rose 1.2% in January, not seasonally adjusted (1.4%, seasonally adjusted), and 4.6% over 12 months, the Bureau of Labor Statistics (BLS) reported on Thursday. The PPI for material and supply inputs to construction industries, a weighted average of all materials used in every type of project plus items consumed by contractors, rose 1.3% for the month and 1.6% over 12 months. The large one-month rise was driven increases in PPIs for diesel fuel, 11.5% and 41%, respectively; copper and brass mill shapes, 5.2% and 55%; aluminum mill shapes, 3.2% and 4.1%; steel mill products, 2.0% and -3.7%; asphalt paving mixtures and blocks, 1.9% and -4.1%; and lumber and plywood, 0.2% and 3.5%. Prices fell in January for gypsum products, -1.2% and -12%; concrete products, -0.7% and -3.2%; plastic construction products, -0.4% and -0.6%; and construction machinery and equipment, -0.1% and 0.1%. Rising materials costs added to the squeeze on contractors, as PPIs for finished buildings (which include contractors' overhead and profit) and subcontractors generally fell: new offices, -0.4% and -4.7%; warehouses, -0.1% and -5.8%; industrial buildings, -0.1% and -5.6%; schools, 0.6% and -1.7%; roofing contractors, -0.7% and -1.5%; electrical contractors, -0.1% and -3.7%; concrete contractors, 0.2% and -1.8%; and plumbing contractors, 1.0% and 0.5%.

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January Construction Retreats One Percent read the headline on McGraw-Hill Construction (MHC)'s February 19 press release. "January construction starts higher," Reed Construction Data proclaimed on February 11. Far from being anomalous, the difference in direction was typical of these two measures of construction spending. Census Bureau numbers usually tell yet another story. Why?        

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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.

The value of nonresidential construction starts in January climbed 6.3% from December and 20% from January 2009, Reed Construction Data (RCD) reported on Thursday, based on data it compiled. "January starts increased 10% for nonresidential buildings from December but only 2% for heavy construction projects. Both highway and water/sewer starts fell slightly, but there were offsetting gains for airports and power projects," Chief Economist Jim Haughey wrote. "Starts jumped 47% for commercial buildings, reversing the large drop in November….Manufacturing starts, which are heavily energy-related, plunged to only 15% of the 2009 monthly average….Commercial starts continue to be restrained by the inability of some developers to obtain credit. This problem will worsen at least until mid-2010 as lenders continue to withdraw from real estate under pressure from rapidly rising commercial mortgage defaults. RCD expects this restraint to be more than offset by the rising expected profitability of commercial property when it is completed nine months or more ahead. By contrast, the availability of financing for institutional buildings will not improve in the first half of 2010. Stimulus plan funding will not be significant until late in the year. Funding in regular budget appropriations is now declining at all levels of government. Hospital and higher education generate their own funding and will not be impacted by reduced government funds."

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The pain continues unabated for construction companies and workers. The industry lost another 75,000 employees in January, seasonally adjusted, virtually unchanged from the monthly average of 77,000 over the past 12 months, according to data the Bureau of Labor Statistics (BLS) released on February 5.

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Nonfarm payroll employment "was essentially unchanged (-20,000)" in January, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported today, far less than the average (-335,000) over the past 12 months. The unemployment rate fell from 10.0% in December to 9.7% (10.6%, not seasonally adjusted). However, construction employment sank by 75,000, nearly the same as the 77,000 average over the past 12 months. The construction unemployment rate rose to 24.7%, not seasonally adjusted. Over the past 12 months, construction accounted for nearly one-quarter of all job losses (926,000 out of 4.0 million, or 23%), even though the industry now employs only 4.3% of all workers (5,625,000 out of 129.5 million), the lowest total since 1996 and lowest share of overall employment since 1992. In an ominous sign for future building construction, architectural services employment (not seasonally adjusted) fell for the 17^th straight month in December (-1,300 jobs or 0.8%) and dropped 14.6% from December 2008. In contrast, engineering and drafting services employment (not seasonally adjusted) was nearly unchanged in December (- 200 or 0.0%) and 5.7% from December 2008.

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CONSTRUCTION DRAGS U.S. EMPLOYMENT FIGURES AS 75,000 IN INDUSTRY LOSE JOBS, ONE IN FOUR CONSTRUCTION WORKERS ARE UNEMPLOYED

Stimulus, Especially Highway Funding, Appears to Be Lone Bright Spot in "Dire" Employment Report As Construction Industry Continues to Suffer from Depression-Era Unemployment Levels

 Overall U.S. job growth continued to be undermined by the severe downturn affecting the construction industry as another 75,000 construction workers lost their jobs in January 2010 and the industry's unemployment rate jumped to 24.7 percent, according to federal employment figures released today.  Excluding construction job losses, nonfarm payroll employment actually rose for the second time in three months, the Associated General Contractors of America noted.

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ONLY 4 OUT OF 337 CITIES ADDED CONSTRUCTION JOBS IN 2009 AS CONSTRUCTION SPENDING DROPS TO LOWEST LEVEL IN 6 YEARS

New Data Shows Construction Employment Down 38 Percent in Leominster-Fitchburg, Mass., Up 13 Percent in Harrisburg, PA., As Administration Offers New Infrastructure Spending and Cuts 

 Construction employment grew in only four out of 337 metropolitan areas in 2009 as spending on construction projects dropped by $100 billion in December to a six-year low of $903 billion, according to a new analysis by the Associated General Contractors of America of federal figures released today. 

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