|Send to a Friend||View / Add Comments|
Employment rises overall and in construction; other construction signals are mixed
Nonfarm payroll employment rose by a seasonally adjusted 112,000 in January, the Bureau of Labor Statistics (BLS) reported today. That was the fifth straight monthly gain and the largest since December 2000. (BLS performed an annual "benchmark" revision that changed August's gain to a loss, among other changes.) But, in a sign of how sluggish job growth remains, this figure was smaller than in all but five months between 1993 and 1999. Construction employment rose by 24,000 to 6,808,000, the highest level since October 2001. (The benchmark revision lowered recent construction totals so that December's figure was no longer a record, as originally estimated.) In the past 12 months, construction added 96,000 jobs (+1.4%) while all other nonfarm payroll employment fell by 131,000 (-0.1%). Each of the three BLS construction subcategories gained over the month and year. Employment in construction of buildings rose by 7,000 for the month and 19,000 (1.2%) for the year; heavy and civil engineering construction, +9,000 and +15,000 (1.9%); and specialty trade contractors, +8,000 and +62,000 (+1.5%). Hourly earnings in construction, not seasonally adjusted, averaged $19.03 in January (22% higher than the total private average), up 1.8% from January 2003; average weekly earnings in construction rose just 1.3% over the year as average weekly hours dipped.
Productivity in the nonfarm business sector rose at a seasonally adjusted annual rate of 2.7% in the fourth quarter and 4.2% in all of 2003, BLS reported Thursday. Although these gains were less than the 9.5% jump in the third quarter and 4.9% in 2002, the two-year increase was the largest since1949-51, BLS said. That explains how total output in the sector could rise (3.7% in 2003, 2.3% in 2002), even as labor hours decreased (-0.5% and -2.5%) and how unit labor costs could fall (-1.2% in 2003 and -2.5% in 2002, the first drop since 1983) even though hourly compensation rose (2.9% and 2.2%). The drop in unit labor costs, in turn, explains how consumer prices have been virtually flat even though businesses are experiencing increases in the cost of many materials and supplies: they are getting so much more output per hour that they achieve production gains with the same or less labor while absorbing higer health care, materials, and (modest) wage increases.
A variety of reports this week point to a strengthening overall economy but with mixed signals about construction. For instance, on Wednesday the Institute for Supply Management (ISM)'s monthly survey of purchasing managers showed business activity at nonmanufacturing companies "increased for the 10th consecutive month in January .New orders, order backlogs, employment, prices, imports, and exports increased." Overall activity increased at 13 of 17 industries surveyed, was flat at three, and fell only in construction. Construction also was one of: two industries in which new orders fell; five reporting higher backlog of orders but also falling employment and inventories; and six reporting higher prices. On Monday ISM reported that activity in manufacturing grew in January for the eighth straight month and "gained momentum."
New orders for manufactured goods (excluding semiconductor manufacturing) rebounded in December, rising 1.1%, seasonally adjusted, after an 0.9% drop in November, the Census Bureau reported Wednesday. For the year, orders rose 3.9%. Orders for construction machinery tumbled 18% in December, offsetting a 17% leap in November, and climbed 8.1% for the year. Orders for construction materials and supplies rose 0.7% in December, fell 1.7% in November, and rose 0.9% for the year.
The Federal Reserve on Tuesday released its quarterly survey of senior lending officers at 56 domestic and 21 foreign banks operating in the U.S. There was a moderate easing of lending standards, and increase in demand, for business (commercial and industrial or C&I) loans. "A few domestic banks also eased lending standards on commercial real estate loans over the same period .Both domestic and foreign institutions reported stronger demand for commercial real estate loans, on net, over the past three months."
The value of construction put in place set a sixth straight seasonally adjusted record in December, $933 billion at an annual rate, Census reported Monday. That was up 0.4% from the downwardly revised November record of $930 billion (originally $934 billion). Construction totaled $898 billion in 2003 as a whole, up 4.3% from 2002. Of Census's three subcomponents, private residential construction rose 0.9% for the month and 10.5% for the year; private nonresidential construction fell 1.1% and 5.7%, and public construction rose 0.6% and 2.8%.
Two reports suggest continuing demand for residential construction. National Assn. of Home Builders Chief Economist David Seiders said condos "represented slightly more than a quarter of all multi-family development started in 200-a share that approaches that of the 1987 and 1993 booms in condo construction-and that rate is likely to continue to rise in 2004." The National Assn. of Realtors reported Tuesday that "a seasonal decline in home prices and rising family income led to improved housing affordability conditions in the fourth quarter "
> The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved.
|[ Back to Top ]|