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."

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.

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.

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.

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. 

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%.

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.

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.

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%.

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.