Construction employment
rose by 33,000, the largest gain in nearly four years, but much
of the increase may have represented catch-up from a weather-exacerbated drop
of 22,000 jobs in January.
Nonfarm payroll employment
increased by 192,000 in January, seasonally adjusted, and the
unemployment rate
dipped 0.1 percentage point to 8.9 percent (9.5 percent, not seasonally
adjusted), the Bureau of Labor Statistics reported on March 4.
Construction employment rose by 33,000 (0.6 percent), the largest gain in
nearly four years, but much of the increase may have represented catch-up from
a weather-exacerbated drop of 22,000 jobs (initially estimated as 32,000) in
January. The total in February, 5,509,000, was 24,000 (0.4 percent) lower than
in February 2010 and 2.2 million (29 percent) lower than in the peak month,
April 2006.
Construction
employment dropped from the same month a year earlier for the
47th consecutive month but the 0.4 percent decline was the smallest
year-over-year decrease since June 2007, suggesting the slump is close to
ending. The
unemployment
rate in construction was 21.8 percent, not seasonally adjusted, down
from 27.1 percent in February 2010 but still the highest of any industry and
more than double the all-industry rate. (BLS does not publish seasonally
adjusted rates by industry.)
Among BLS’ five construction
employment categories, heavy and civil engineering construction had the largest
year-over-year percentage gain, 3.3 percent (and 0.5 percent for the month),
probably as a result of federal stimulus, base realignment and Gulf Coast
hurricane-prevention projects. Nonresidential specialty trade contractors added
jobs for the month and year-over-year (0.8 percent and 0.6 percent,
respectively). Other segments were mixed: nonresidential building, -0.3percent
and 0.5 percent; residential specialty trades, 0.8 percent and -3.0 percent;
and residential building, 0.4 percent and -3.4 percent.
Architecture and engineering services employment, a harbinger of future demand for construction,
rose 0.2 percent and 0.1 percent.
Average hourly earnings in construction slipped 4 cents in February to $25.39, seasonally
adjusted, up 20 cents (0.8 percent) from a year ago.
Manpower Inc. reported that 16 percent of the
18,000 employers it surveyed expect to add employees and 6 percent expect to
cut in the second quarter. “When seasonal variations are removed from the date,
the
net employment
outlook [the difference between the percentage
expecting to add less those expecting to cut] is +8 percent,” unchanged from
the first-quarter outlook and up from 6 percent a year ago. “Employers have a positive outlook in all of the 13
industry sectors included in the survey,” including construction, where 16
percent of employers expect to hire and 10 percent to cut, for a net employment
outlook of 65. The net for construction was 14 percent in the Northeast, 11
percent in the Midwest, 5 percent in the West and 1 percent in the South.
The
national
average of construction
costs
(labor and materials, general contractor and subcontractor overhead costs and
fees) inched up 0.1 percent in the fourth quarter and 0.7 percent from a year
earlier, construction consultancy
Rider Levett Bucknall
reported on March 1, based on data it compiled in 13 metro areas.
Year-over-year increases ranged from 3.2 percent in Los Angeles and 2.6 percent
in San Francisco to -1.0 percent in Las Vegas.
The Means Historical Cost
Index, which incorporates materials costs, labor rates and equipment rentals
for 318 U.S. and Canadian cities, rose 0.9 percent from Oct. 1 to Jan. 1, and
2.3 percent from Jan. 1, 2010, the price-tracking firm
RSMeans
reported last month. The 30-city average wage and benefits for 20 trades was
$45.44, a rise of 45 cents (1 percent) from mid-2010.
“Reports from the 12 Federal Reserve districts
indicated that
overall
economic activity continued to expand at a
modest-to-moderate pace in January and early February,” the Fed reported March
2 in the latest Beige Book, a summary of informal soundings of businesses in
each district. (Districts are referred to by the name of their headquarters
cities.) “Recent activity in
residential real estate varied, but overall
sales and construction remained at low levels across all districts.
Construction activity was described as flat or down by Cleveland, Atlanta,
Minneapolis, and Kansas City. … The outlook for residential sales and
construction improved marginally, although activity is expected to remain at
low levels. … A slight uptick is expected in Chicago and San Francisco
construction.
“
Nonresidential construction remained weak according to most accounts. The
Boston, Philadelphia, Atlanta, Chicago, St. Louis, and Dallas districts
reported weak levels of construction activity, while Chicago noted a slight
pickup. Cleveland district contractors cited increasing inquiries, and
unexpected growth in commercial construction was noted in the Minneapolis district.
Overall, contacts anticipate a slow recovery in commercial real estate
markets.”
New orders for U.S. manufactured goods jumped 3.1 percent in January, adjusted for
seasonal variation but not price changes, for the sixth increase in seven
months, the Census Bureau reported March 4. Orders were 10.8 percent higher
than in January 2010.
Orders
for construction materials and supplies increased 2.0 percent for the month and 8.5
percent year-over-year;
orders for construction machinery, which tend to be volatile, fell -0.7 percent in
January but leaped 107 percent year-over-year.
Occupancies improved in the fourth quarter of 2010 for all
five major commercial property types in more than 50 metro areas surveyed by
Dividend Capital Research,
the firm reported March 7. “New
construction remained at 40-year lows, which should lead to continued occupancy
increases in 2011. Office occupancies improved 0.3 percent ... and
rents improved 0.4 percent for the quarter but were down 1.5 percent annually.
Industrial occupancies improved 0.2 percent ... but rents fell 0.45 percent
[and 4.5 percent]. Apartment occupancy was flat … and rent…improved 0.7 percent
[and 1.9 percent]. Retail occupancy improved 0.4 percent ... but rent [fell 1.0
percent and 3.8 percent]. Hotel occupancies improved 1 percent and [revenue per
available room] declined 6.9 percent for the quarter but was up 9.8 percent
year-over-year.”
