The value of nonresidential construction starts in July dropped 9% compared with July 2009, Reed Construction Data reported on Thursday. Year-to-date starts for the first seven months of 2010 combined rose 8% from January-July 2009. Nonresidential building construction declined 14% July-to-July but rose 5% year-to-date, while heavy construction fell 1% and rose 12%, respectively. "Starts were about steady again in July [compared with June] as they have been for most of the year, allowing for the usual seasonal variation," Chief Economist Jim Haughey said. "Heavy starts were the highest in six months with a surge in highway and bridge projects in the first month of the new fiscal year for most states….There were sizable July gains for developer-financed retail, hotel and warehouse (but not office) projects, which signals that this cyclically sensitive sector may be recovering. However, institutional building starts declined in July. Federal stimulus funds cannot offset the collapse of state and local government finances."

Nonfarm payroll employment fell by 131,000, seasonally adjusted, in July, "reflecting the departure of 143,000 temporary Census 2010 workers from federal government payrolls," the Bureau of Labor Statistics (BLS) reported on Friday. Total private-sector employment rose by 71,000. "Thus far this year, private sector employment has increased by 630,000, with about two-thirds of the gain occurring in March and April," BLS stated. The job loss in June was revised to 221,000 from the initial estimate of 125,000. The unemployment rate in July was 9.7%, not seasonally adjusted (9.5%, seasonally adjusted, matching the June rate). Construction employment dropped by 11,000, seasonally adjusted, to 5,573,000, a 14-year low. BLS said, "10,000 construction workers were off payrolls due to strike activity," which has now ended. Construction job losses have moderated: the decrease from July 2009 to July 2010, 6.3% or 376,000 jobs, was only about one-third as large as a year ago. Among the five BLS construction categories, residential building contractors had the most severe losses, -1.7% for the month and -8.9% over 12 months; followed by residential specialty trades, -0.5% and -4.3%; nonresidential building, -0.3% and -5.4%; heavy and civil engineering, -0.1% and -3.6%; and nonresidential specialty trade contractors, +0.4% and -8.4%. The unemployment rate in construction fell to 17.3%, unadjusted, in July 2010, from 18.2% in July 2009, as the number of unemployed construction workers dropped to 1,528,000 from 1,687,000. Given the drop in employment over that span, the decrease in unemployment reflects workers who have left construction for other industries or have stopped looking for work in the past 12 months, not net hiring. Average hourly earnings in construction rose 4 cents in July to $25.19, seasonally adjusted, and 33 cents (1.3%) compared with July 2009. Architectural and engineering services employment, a harbinger of future demand for construction, edged up by 0.1% in July but fell 2.6% over 12 months.

CONSTRUCTION EMPLOYMENT DECLINES BY 11,000 BETWEEN JUNE AND JULY WHILE THE INDUSTRY'S UNEMPLOYMENT RATE HIT 17.3 PERCENT

As Stimulus Projects Begin to Wind Down and Private, State and Local Demand Remains Flat, Construction Group Urges Congress and the Administration to Act on Long-Delayed Infrastructure Bills

Construction employment decreased by 11,000 between June and July 2010 while the industry's unemployment rate fell to 17.3 percent, according to a new analysis by the Associated General Contractors of America of federal employment data released today.  The third month of construction employment declines, despite the stimulus, reflects overall weak demand for private, local and state funded construction, association officials noted. 

The Census Bureau's report on construction spending in June showed how uneven the industry's condition is. Total spending edged up 0.1 percent to a seasonally adjusted annual rate of $836 billion. (Seasonal adjustment takes into account variation due to normal weather or holidays. Annual rate allows ready comparison to full-year totals.) Despite the tiny gain for the month, the June total was 7.9 percent smaller than in June 2009.

STIMULUS HELPS CONSTRUCTION SPENDING POST SMALL GAIN IN JUNE BUT PAIN CONTINUES FOR OTHER CONTRACTORS, ASSOCIATION SAYS

Total construction spending eked out a small rise in June as gains in stimulus-aided public categories offset decreases in homebuilding and private nonresidential spending, the Associated General Contractors of America said today in an analysis of new Census Bureau data. "Stimulus dollars are supporting construction jobs, but the pain is continuing for most contractors and their workers who depend on private projects or school construction," said Ken Simonson, the association's chief economist.

"Economic activity has continued to increase, on balance," since late May, the Federal Reserve reported on Wednesday in the "Beige Book," a compilation of informal soundings of business conditions by the 12 regional Fed banks. Regions are referred to by the banks' headquarters cities. "Commercial real estate markets, especially construction, remained weak….Richmond, Chicago, and Dallas reported that firms in construction-related manufacturing experienced weak demand; construction supplies sales were flat in Kansas City, and Minneapolis reported that a firm in the sector was increasing production….Construction remained limited in several Districts. In the Atlanta District, residential construction activity softened from already weak levels. Homebuilders in the Cleveland District do not expect a turnaround in new home construction any time this year. Builders in the Chicago District are not introducing new inventory without a signed contract on a home. Housing starts were expected to decline for the second half of the year in the Dallas District and to increase slightly over the next three months in the Kansas City District. Commercial and industrial real estate markets continued to struggle in all twelve Districts. Overall, vacancy rates were flat to slightly increased and continued to exert downward pressure on rents. Construction activity remained weak in most Districts. The New York District noted that commercial development remained generally sluggish despite some pickup in office and retail leasing in New York City. Atlanta, Minneapolis, and Dallas reported that construction activity continued to be weak or to decline, and Cleveland reported that the increase in construction from previous reports has begun to diminish. Philadelphia reported that projects funded with federal stimulus support were near completion with no prospects for additional major construction, while Chicago reported that public infrastructure construction picked up. Developers reported difficult credit conditions in the Cleveland, Richmond, St. Louis, and Kansas City Districts, while the Dallas District reported a few developers going out of business. The outlook for commercial and industrial real estate across the Districts ranged from further declines in activity to slow growth."

CONSTRUCTION JOBS DROP IN 285 OUT OF 337 METRO AREAS BETWEEN JUNE 2009 & 2010 AS STIMULUS CONTINUES TO BE OUTPACED BY WEAK DEMAND 

Chicago and Pascagoula, Mississippi Top Job Loss List, While Prince Georges-Calvert-Charles Counties, Maryland and Hanford-Corcoran, California Top List of Metro Areas Adding Jobs

Construction employment declined in 285 out of 337 metropolitan areas between June 2009 and June 2010 according to a new analysis of federal employment data released today by the Associated General Contractors of America.  The employment figures demonstrate how weak overall demand for construction is outpacing the benefits of the stimulus' $135 billion in construction-related investments, association officials noted.

The seasonally adjusted unemployment rate decreased from May to June in 39 states and the District of Columbia, rose in five states and remained unchanged in six, the Bureau of Labor Statistics (BLS) reported on Tuesday. Compared to June 2009, 22 states and D.C. had lower rates, 24 had higher rates and four were unchanged. Earlier, BLS had said the national unemployment rate dropped from 9.7% in May to 9.5% in June, the same level as in June 2009. Nonfarm payroll employment increased from May to June in 21 states and D.C., decreased in 27 states and stayed the same in Nebraska and Rhode Island. Compared to June 2009, employment rose in 22 states and D.C. and fell in 29 states. Construction employment increased for the month in 22 states, fell in 26 and remained static in Colorado, D.C. and Montana. Year-over-year construction employment dropped in 44 states plus D.C. and climbed in six states (the largest total since October 2008): Kansas, 7.7%, 4,400 jobs; Alaska, 3.1%, 500 jobs; Arkansas, 2.4%, 1,200 jobs; West Virginia, 2.4%, 800 jobs; New Hampshire, 2.3%, 500 jobs; and North Dakota, 0.5%, 100 jobs. The largest 12-month percentage losses were in Nevada, -2.4% and -19,500 jobs; Vermont, -18.5%, -2,500 jobs; Wyoming, -16.6%, -4,000 jobs; Washington, -14.3%, -22,900 jobs; Idaho, -13.8%, -4,600 jobs; and Colorado, -13.7%, -17,600 jobs. California lost the most jobs over the year, 74,400 (-12.0%). BLS combines mining and logging with construction in six states and D.C. to prevent disclosure of data about industries with few employers. BLS does not calculate industry-specific unemployment rates by state.

Construction materials costs have retreated after a yearlong advance. The producer price index (PPI) for inputs to construction-a weighted average of the prices of materials used in all types of construction, plus items consumed by contractors, such as diesel fuel-tumbled 0.9 percent, seasonally adjusted, in June. That was the largest one-month drop since February 2009 and followed a run of 10 price increases in the previous 14 months.

CONSTRUCTION EMPLOYMENT SHOWS SIGNS OF "STABILIZING" AS SIX STATES ADD JOBS BETWEEN JUNE 2009 & 2010; 22 STATES ADD JOBS DURING THE PAST MONTH

Kansas Tops Yearly and Kentucky Tops Monthly Gainers; Nevada and California Experience Most Jobs Losses During Past Year While Wyoming Experiences Largest Monthly Percent Decline

Construction employment edged closer to stabilizing in June, as half the states either added construction jobs or kept the same number as in May, the Associated General Contractors reported in an analysis of federal employment data released today. Compared to June 2009, construction employment rose in six states, the largest number of states to post year-over-year increases since October 2008.