State Construction Employment, Hiring Plans, Permits, Supplies Turn Up
Seasonally adjusted nonfarm payroll employment by state grew in 34 states from April to May, even though overall employment dropped, the Bureau of Labor Statistics (BLS) reported Friday. But compared to May 2002, employment in May 2003 was lower in 28 states and the District of Columbia. Construction employment fared a bit better, rising in 35 states over the month and in 26 over the year. The largest May-to-May construction gains were in Alaska, Colorado, and Georgia (+5%); the largest losses were in Connecticut, Massachusetts, and Wisconsin (-6%).
Manpower Inc. reported on June 16 that its latest quarterly survey of employers hiring plans found seven out of 10 sectors indicate that hiring activity will be higher than intentions voiced for the second quarter of 2002. However, eight of the categories envision softer staffing scenes than were projected three months ago. Mining and Construction are the only categories that foresee increases over both last year and last quarter.
Building permits in May, seasonally adjusted, rose 3.7% from a revised April total and 3.9% from the May 2002 level, the government reported on June 17. Mays advance was led by permits for multi-unit housing, with structures of 5 or more units jumping 18%, while permits for single-family homes rose just 0.3%. For the first five months of 2003, both single- and multi-unit permits totaled 3% more than in the same period of 2002. Permits are generally a highly reliable indicator of near-term housing construction. Housing starts climbed a seasonally adjusted 6% from Aprils revised figure to May but were down by 1% from May 2002. Year-to-date starts were up 1% from the first five months of 2002 as a 3% rise in single-family starts overcame a 4% decline in 5+ unit starts.
Industrial production (IP) at mines, utilities, and factories, seasonally adjusted, inched up 0.1% in May, following drops of 0.6% in both April and March, the Federal Reserve announced June 17. IP was 0.8% lower than in May 2002, with factory output down by 1%. Output of construction supplies rose 0.3% in May but was 3.6% below the year-ago level. Factory capacity utilization stood at 72.6%, compared to 73.9% a year before and an average of 80.2% in 1972-2002, suggesting that demand for factory construction will remain dormant for quite some time.
The seasonally adjusted consumer price index for all urban consumers (CPI-U) was unchanged in May and in the 3 months ending in May, BLS announced on June 17. For the 12 months through May the index was up 2.1%. Without counting volatile food and energy costs, the core index was up just 1.6% for the past 12 months and 1% annualized for the past quarter. The CPI for urban wage earners and clerical workers (CPI-W) before seasonal adjustment, used for adjusting many labor contracts, rose 2% for the year ending in May.
Average weekly earnings, an indicator of whether workers are staying ahead of inflation, rose 2.6%, or 0.5% after inflation, for the year ending in May, BLS reported on June 17. Weekly earnings for construction workers rose 3.9% for the year, with hourly earnings climbing 2.8% and average hours growing 1%. Industries for the first time were classified using the North American Industrial Classification System (NAICS) but this had little effect on construction totals compared to the former Standard Industrial Classification (SIC) codes.
Insurance premiums for health maintenance organizations (HMOs) could rise 18% next year, according to a survey of 140 large employers released yesterday by benefits consultant Hewitt Associate. In addition, employers are increasing employee co-payments and shares of premiums. But the rate of increases in the cost of property insurance for commercial real-estate owners has slowed, according to an article in the Wall Street Journal June 18. The average rate increase for policies renewed in January ranged from 0% to 10%, compared with 80% to 90% in January 2002, insurance brokers estimate. And if January serves as any indication, owners renewing for the year beginning July 1 should expect to see, on average, smaller or no increases in their rates. Some may even see reduced rates.
Copyright © 2002 Mike Holt Enterprises,Inc.