Construction hits three-year highs as jobs climb in January; spending rises in December
Total hours worked in construction increased by 2.3% over the year, implying that contractors are lengthening working hours and also hiring new workers. The unemployment rate for former construction workers dropped from 17.7%, not seasonally adjusted, in January 2012 to 16.1%. Residential construction employment (residential building and specialty trade contractors) rose by 14,500, seasonally adjusted, for the month and 53,200 (2.6%) for the year. Nonresidential employment (building, specialty trades and heavy and civil engineering construction) climbed 13,700 in January and 48,900 (1.4%) over 12 months.
Annual “benchmarking” adjustments showed the economy added 335,000 more jobs in 2012 than previously estimated, including 73,000 more in construction.
Construction spending increases
Construction spending in December totaled $885 billion at a seasonally adjusted annual rate, the highest rate since September 2009 and the ninth consecutive monthly increase, the Census Bureau reported Feb. 1. Totals for November and October were each revised up about 1%, while the December figure was 0.9% higher than in November and 7.8% higher than a year ago. Full-year spending totaled $850 billion, the most since 2009 and a rise of 9.2% from 2011 but still 27% below the peak year, 2006. Private residential construction spending jumped 2.2% for the month, 24% December-to-December and 17% for the full year.
Private nonresidential spending climbed 1.8% from November, 7.6% from a year ago and 15% for the full year. Public construction spending fell 1.4% for the month, 5.6% from December 2011 and 2.7% for the full year.
GDP falls slightly
Real (net of inflation) gross domestic product dipped 0.1% at a seasonally adjusted annual rate in the last quarter of 2012, after growing 3.1% in the third quarter. Steep declines in government purchases and investments, net exports and inventories offset increases in consumer spending, business equipment and residential investment, the Bureau of Economic Analysis reported Jan. 30.
Real private investment in nonresidential structures (including wells and mines) fell 1.1%, after a flat third quarter. Real residential investment leaped 15%, following a 14% gain. Real government investment in structures rose 2.2%, following a 2.0% decline. The price index for private nonresidential structures accelerated slightly to a 1.2% increase at a seasonally adjusted annual rate from 1.0%. The price index for residential investment cooled to 2.7% from 3.3%. The price index for government investment slowed to 1.6% from 2.2%.
Anticipating the GDP report, a quarterly survey of 65 corporate economists that the National Association for Business Economics released Jan. 28 found “business activity advanced at a steady pace in the fourth quarter of 2012 … More than one-quarter of survey respondents said that their firm postponed at least some hiring and capital spending in the three months leading up to the then-impending fiscal cliff … Expectations for capital spending on structures over the next year were positive [among 43 respondents to this question], but weaker than three months earlier …, with a smaller share of panelists expecting their firms to increase spending and slightly more expecting … to reduce it or keep it the same.”
Metro areas see increased construction employment
Nonfarm payroll employment, not seasonally adjusted, increased in 283 out of 372 metropolitan areas, between December 2011 and December 2012, decreased in 83 and was unchanged in six, BLS reported Jan. 30. Construction employment increased in 139 out of 337 metro areas (including divisions of large metros) for which BLS provides data, shrank in 133 and was stagnant in 65, according to an AGC analysis released Jan. 30. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.)
Pascagoula, Miss. again added the highest percentage of new construction jobs (42%, 1,900 combined jobs), followed by Haverhill-North Andover-Amesbury, Mass.-N.H. (22%, 800 combined jobs) and Lafayette, La. (17%, 1,100 construction jobs). Houston-Sugar Land-Baytown again added the most jobs (17,600 construction jobs, 10%), followed by the Dallas-Plano-Irving division (8,300 combined jobs, 8%); and the Seattle-Bellevue-Everett division (7,800 construction jobs, 12%).
Jackson, Miss. (-20%, -2,000 construction jobs) lost the highest percentage of jobs, followed by Columbus, Ind. (-19%, -300 combined jobs) and Springfield, Mass-Conn. (-18%, -1,400 combined jobs). The largest job losses were in Atlanta-Sandy Springs-Marietta (-4,900 construction jobs, -5%), followed by Portland-Vancouver-Hillsboro, Ore.-Wash. (-3,600 construction jobs, -7%).
Total compensation (wages, benefits and required employer payments) in private industry rose 0.5%, seasonally adjusted, in the fourth quarter of 2012, 0.4% in the third quarter and 1.9% from a year ago, BLS reported Jan. 31. Compensation in construction rose 0.3% in the fourth quarter, 0.8% in the third and 1.6% over the year.
Read here to view December metro employment tables.