Latest News / Operations & Technology

Construction Jobs Drop In November; Census, Reed Say Spending Rose In October

Nonfarm payroll employment rose by 120,000 in November, seasonally adjusted, and the unemployment rate fell from 9 percent in October to 8.6 percent (8.2 percent, not seasonally adjusted), the Bureau of Labor Statistics reported Dec 2. Construction employment fell for the second month in a row, by 12,000 (-0.2 percent) to 5,522,000. Employment was up 18,000 (0.3 percent) from a year ago but has varied little in either direction since February 2010.

The unemployment rate in construction was 13.1 percent, not seasonally adjusted, down from 18.8 percent a year earlier. (BLS does not adjust industry rates.) The drop in industry unemployment, unaccompanied by a rise in construction employment, suggests workers are finding jobs in other industries, retiring, returning to school or training, or leaving the workforce. That may make hiring more difficult when construction demand picks up.

Construction spending increased 0.8 percent in October to $799 billion at a seasonally adjusted annual rate, the third straight monthly gain, the Census Bureau reported Dec. 1. Totals were revised up for September by $5 billion (0.6 percent) and for August by $4 billion (0.4 percent). The October total was $36 billion (4.7 percent) higher than the low point in March but remained 0.4 percent lower than a year ago.

As in recent months, public construction shrank (-1.8 percent for the month, -9.4 percent over 12 months) while there were gains for private nonresidential (1.3 percent and 8.4 percent, respectively) and residential construction (3.4 percent, 1.7 percent). The largest private nonresidential segment also had the largest monthly and annual gains: private power construction (including power plants, renewable, transmission, oil and gas fields and pipelines), 5.8 percent and 18 percent. Next in size, commercial construction (retail, warehouse and farm) grew 0.4 percent and 12 percent, followed by manufacturing, -0.4 percent and 14 percent.

New single-family construction was up 0.6 percent and 1 percent; new multifamily fell 0.8 percent for the month but rose 6.7 percent for the year. The largest public categories were highways, -0.4 percent and -8.3 percent, and public educational spending, -1.8 percent and +0.6 percent.

The value of nonresidential construction starts “rebounded 14 percent in October from September’s 21 percent drop,” while year-to-date starts for the first 10 months of 2011 combined rose 10 percent from the same period in 2010, Reed Construction Data reported Nov. 23, based on data it collected. Year-to-date commercial starts climbed 13 percent, including a 15 percent gain for retail and 56 percent leap for office starts. Industrial building starts doubled year-to-date. Institutional building starts climbed 12 percent, with medical facilities jumping 23 percent year-to-date. Heavy engineering starts rose 4.8 percent year-to-date.

Beige Book

“Overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve districts except St. Louis, which reported a decline in economic activity,” the Fed stated Nov. 30 in the latest Beige Book, an informal summary of business conditions in October through mid-November in the 12 Fed districts, which are referenced by their headquarters cities. “Single-family home construction was weak and commercial construction was slow….For construction-related goods, Chicago and Minneapolis reported declining demand, while Dallas said demand was stable. Overall, St. Louis saw more plant closures than plant openings or expansions.

“Residential construction remained sluggish. Single-family home construction remained weak, while multifamily construction picked up in New York, Philadelphia, Cleveland, Chicago and Minneapolis. San Francisco remained ‘anemic,’ while St. Louis and Kansas City reported decreased activity….Commercial construction was somewhat mixed. Cleveland saw steady to slowly improving commercial construction; Chicago and Minneapolis experienced modest to moderate increases. New York and Philadelphia noted generally weak conditions; Richmond and St. Louis reported slow activity, although industrial construction picked up….Minneapolis reported that more wind energy projects were planned.”

States' Fiscal Picture

The Fiscal Survey of States, released Nov. 29 by the National Association of State Budget Officers and the National Governors Association, “demonstrates the precarious financial situation facing states. In 2012, states appear on track for continued, at least moderate, financial improvement…[However,] the growth in revenue collections is not improving significantly enough to cover both the wind-down of Recovery Act funds and the increased expenses states face in areas like health care and corrections….Forty-three states enacted budgets with increasing general fund expenditures for fiscal 2012 compared to fiscal 2011. However, even with these proposed increases, 29 states would still have lower general fund spending in fiscal 2012 compared to the pre-recession levels of fiscal 2008.”

In addition, “‘Local governments are still seeing declines in their revenues, because even if property values have stabilized, property taxes tend to follow a couple years behind,’ said Dan Crippen, the NGA’s executive director, the Washington Post reported Nov. 29. “Property taxes are coming in much lower for school districts and cities and counties.” Falling property tax receipts imply less funding for school and municipal construction.

Property values are stable at best, at least for houses sold or refinanced with mortgages acquired by Freddie Mac or Fannie Mae, the Federal Housing Finance Agency reported Nov. 29. The agency’s house price index rose 0.2 percent, seasonally adjusted, from the second quarter to the third quarter but fell 3.7 percent from a year earlier. There were year-over-year increases in only four states (North Dakota, 5.4 percent; Wyoming, 2.9 percent; Iowa, 1.3 percent; and Nebraska, 0.55 percent) and 18 out of 306 metro areas, led by Bismarck, N.D. (5.5 percent) and Dubuque, Iowa (2.5 percent). The steepest declines among states were in Nevada (-12.3 percent) and Arizona (-12.0 percent); among metros, in Las Vegas-Paradise (-15.1 percent) and Ocala, Florida (-14.6 percent).  

Did you enjoy this article? Click here to subscribe to Supply House Times. Stay connected with us via social media.

Recent Articles by Ken Simonson

You must login or register in order to post a comment.



Image Galleries

A pictorial look at Supply House Times' travels in the early part of 2015

Industry events are in full swing. Here’s a pictorial look at Supply House Times’ travels in the early part of 2015.

8/26/14 1:00 pm EST

Free Webinar: Low Temperature Heat Emitter Options in Hydronic Systems

With proper design, you can create systems that require supply water temperatures no higher than 120° F under design load conditions.

Supply House Times

march cover

2015 March

SHT's February issue features cover story: Woman-owned American Precision Supply is an industrial PVF success story and the features: Women in Industry: 2015; Manufacturers enthused after record-breaking 2015 AHR Expo; Planning ahead at the ASA Winter Leadership Conference; and Green products abundant at Design & Construction Week 2015.
Table Of Contents Subscribe

Where do you look for new employees?

Where do you look for new employees?
View Results Poll Archive

The Supply House Times Store

2015 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

CS-OflRGBhomepage.jpgWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


facebook Twitter Updated icon Youtube Updated icon    LinkedIn Updated icon  Google+

Premier 125

Premier 125 button

The information SUPPLY HOUSE TIMES uses to rank the Premier 125 is the most accurate we can gather. It is primarily based on responses to a questionnaire we send to the wholesalers in our database, supplemented with information obtained from industry reports and estimates.