Send to a Friend View / Add Comments  
Construction Jobs Leveled Off in January But Value Put in Place and Orders Ended 2004 Strong

Vol. 5, No. 6 Jan. 31-Feb. 4, 2005
The Data DIGest
Ken Simonson, Cheif Economist, Associated General Contractors of America
Phone: 703-837-5313 Fax: 703-837-5407
simonsonk@agc.org

Nonfarm payroll employment grew in January by 146,000, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported today. Gains for the previous three months were revised downward. Nevertheless, employment in January set a record of 132,573,000, finally surpassing the pre-recession peak reached in February 2001. BLS Commissioner Katheen Utgoff noted, "Construction employment was little changed in January, after seasonal adjustment. Adverse weather may have held down employment in the industry during the month. Since its recent low in March 2003, construction has added 407,000 jobs." In the last 12 months alone, construction added 220,000 jobs (3%). Annual "benchmark" revisions raised the total for December 2004 to a record 7,074,000, with January 2005 estimated at 7,065,000. With this report, BLS began issuing monthly counts for residential and nonresidential building and specialty trade contractors. In January, seasonally adjusted employment totaled 926,000 in residential building (up 59,000 or 7% from January 2004), 753,000 in nonresidential building (up 24,000 or 3%), 898,000 in heavy and civil engineering (down 5,000 or 0.6%), 2,117,000 in residential specialty trade contactors (up 61,000 or 3%), and 2,372,000 in nonresidential trades (up 81,000 or 4%). Average hourly earnings in construction over the past 12 months rose just 14 cents (0.7%) to $19.21, seasonally adjusted, probably because the mix of employees shifted more to lower-paid residential building workers. The average in construction was 21% above the all-industry average for production workers.

BLS released data Wednesday on metropolitan area employment in December (www.bls.gov/sae). The release noted, "Over the year, employment growth was most widespread in education and health services, with 230 of 274 metropolitan areas experiencing job gains in this industry sector. Many areas also experienced employment growth in leisure and hospitality; construction; and professional and business services."

The value of construction put in place in December reached $1.032 trillion at a seasonally adjusted annual rate, the Census Bureau announced Tuesday. That was a 1.1% gain over November's upwardly revised total. It marked the 11th straight increase and brought the annual total for 2004 to $998 billion, 9% more than in 2003. Gains were widespread, with yearend acceleration in many categories. For the year, private residential construction rose 14%, private nonresidential construction 4%, and public construction 3%. Within residential, single-family gained 19%, multi-family 9%, and improvements 3%. Within private nonresidential, lodging was up 19%, health care 10%, retail (automotive, food/beverage, multi-retail, other commercial) 9%, office 6%, communication 5%, and manufacturing 2%. Electric power construction fell 11%, warehouse construction 6%, and private educational 3%. Within public construction, the two major components, educational and highways, each rose a little less than 4%. Sewage and waste disposal and public office construction each rose 7%; public transportation facilities climbed 2%. Declining public construction components included amusement and recreation, -8%, public safety, -7%, and water supply, -0.9%.

New orders for manufactured goods (excluding semiconductor manufacturing) rose in December 0.3%, seasonally adjusted (but not adjusted for inflation), Census reported Thursday. The bureau noted that the increase was the seventh in the last eight months and put the series at its highest level since it started in 1992. Orders for December and for all of 2004 rose 11% from year-earlier levels. Unfilled orders, which can indicate a need to build more factory capacity, rose for the 16th time in 17 months and also set a record. Orders for construction materials and supplies rose 0.3% for the month and 13% for 2004 as a whole to $476 billion (11% of total orders). Construction machinery orders slipped 0.6% in December but surged 44% for the year as a whole to $31 billion (10% of total machinery orders).

This week, two automakers announced factory expansions. "Chrysler said it will invest $419 million in its Belvidere, Ill., assembly plant…to overhaul the plant's body shop and make adjustments to the paint shop and final assembly area. GM said [it] is investing about $175 million to prepare its Fort Wayne, Ind., truck-assembly plant for full-size pickup truck production," the Wall Street Journal reported.

Business activity and new orders continued to grow in January but more slowly than in December in both manufacturing and nonmanufacturing industries, according to two surveys of purchasing managers released by the Institute for Supply Management (ISM). Norbert Ore, the chair of the ISM Manufacturing Business Survey Committee, said "the rate of increase of prices continues to decelerate….Additionally, only one commodity [steel] is listed in short supply." In contrast, the nonmanufacturing report included numerous quotes citing higher prices. Among items important to construction, that report cited drywall and steel in short supply and price increases for aluminum, building materials [and, separately, carpets, hardware, and lumber], copper, diesel fuel [also listed as down in price], plastic resin, plywood, PVC, roofing shingles, steel, and freight charges.

> The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved.

Business Management Skills Workbook


This Management Skills Workbook is a no nonsense approach to management. You'll learn how to create a customized strategic plan to move your business to the next level! Subjects include Business Management, Financial Management, Job Management, and Labor Management.

Product Code: BMBK
ISBN: 1-932685-25-1
Pages: 243


  Send to a Friend View / Add Comments  

  [ Back to Top ]

Copyright © 2004 Mike Holt Enterprises,Inc.
1-888-NEC-CODE (1-888-632-2633)