Construction Employment is up Nationally in April, in Most Metros in March; Outlays Rise

Nonfarm payroll employment increased by 288,000, seasonally adjusted, in April and 2,367,000 (1.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported today. Construction employment rose by 32,000 for the month and 189,000 (3.3%) over the year to 6,000,000, the highest total since June 2009. Residential construction employment (residential building and specialty trade contractors) climbed by 13,100 for the month and 107,900 (5.0%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) rose by 18,600 from March and 81,300 (2.2%) year-over-year. All five residential and nonresidential segments added workers for the month and year. Aggregate hours worked in construction increased 3.8% over 12 months. The unemployment rate for jobseekers who last worked inconstruction fell to the lowest April level in seven years: 9.4%, down from 13.2% in April 2013 and a high of 21.8% in April 2010. (Industry unemployment data are not seasonally adjusted and should only be compared year-over-year, not across months.) Since April 2010 the number of unemployed construction workers has dropped by 1,123,000, not seasonally adjusted. But construction employment rose by only 449,000, implying that almost 700,000 experienced workers in the past four years left the industry for employment elsewhere, further training or schooling, retirement, or left the workforce. These departures may make it hard for contractors to find skilled workers if demand rises further, even though the unemployment rate remains higher than the overall nonfarm rate (5.9%, not seasonally adjusted; 6.3%, seasonally adjusted).

From March 2013 to March 2014 construction employment increased in197 out of 339 metropolitan areas (including divisions of larger metros) for which BLS reports construction data, declined in 87 and was unchanged in 55, according to an analysis of BLS data that AGCreleased on Tuesday. (The agency combines mining and logging with construction in most metros to avoid disclosing data for industries with few firms. Because metro data is not seasonally adjusted, comparisons with months other than March are not meaningful.) The two Los Angeles metro divisions added the most jobs over the year: 10,000 construction jobs (9%) in Los Angeles-Long Beach-Glendale, followed by Santa Ana-Anaheim-Irvine (9,100 construction jobs, 12%). The largest percentage gains again occurred in Monroe, Mich. (43%, 900 combined jobs) and El Centro, Calif. (37%, 700 combined jobs). The Gary, Ind. division again had the steepest and largest job losses (-28%, -5,400 construction jobs).

Construction spending in March totaled $943 billion at a seasonally adjusted annual rate, up 0.2% from February and up 8.4% from March 2013, the Census Bureau reported on Thursday. Census revised down the totals for February (-$5 billion) and January (-$2 billion). Private residential spending climbed 0.8% for the month and 16% over 12 months to its highest mark since May 2008. Private nonresidential spending rose 0.2% and 8.6%, respectively. Public construction spending slipped 0.6% and 0.8%, respectively, reaching its lowest total since November 2006. Of the three residential components, new single-family construction increased 0.2% for the month and 13% year-over-year; new multifamily leaped 4.4% and 33%, respectively; and improvements to existing residential structures rose 0.6% and 16%. The largest private nonresidential segment—power (including conventional and renewable power plus oil and gas fields and pipelines)—rose 0.7% in March and 2.8% from a year ago. The next three private segments (in descending order of 2013 size) were mixed for the month but up year-over-year: manufacturing construction, 0.6% and 7.9%; commercial (new and renovated retail, warehouse and farm), -1.7% and 9.3%; and office, 0.3% and 13%. Of the top two public segments, highway and street construction rose 0.5% and 8.5%, while public educational spending fell 2.3% and 5.3%.

The employment cost index, a weighted average of all wages and salaries, benefits, and required employer payments such as unemployment and worker’s compensation, rose 0.4% in the first quarter, seasonally adjusted, for all private-sector employees and was flat for construction industry employees, BLS reported on Wednesday. From March 2013 to March 2014, compensation rose 1.7% overall and 1.4% for construction, less than the 2.0% rate for each from December 2012 to December2013. The figures for construction may understate the increases in both residential and nonresidential segments because employment grew more rapidly in the lower-paid residential portion (4.9% from March 2013 to March 2014) than the higher-paid nonresidential segment (1.4%).

Real (net of inflation) gross domestic product (GDP) inched up 0.1% at a seasonally adjusted annual rate in the first quarter, compared with 2.6% in the fourth quarter of 2013, the Bureau of Economic Analysis reported on Wednesday. Private real fixed investment in nonresidential structures(including mines and wells) edged up 0.2% after sinking 1.8% in the prior period. Real residential investment fell 5.7% after dropping 7.9%. Real government gross investment in structures plunged 11% after sagging 6.0.% Price indexes rose 1.3% in the first quarter and 1.6% in the fourth quarter of 2014 for GDP; 4.3% and 3.1% for private nonresidential structures; 2.2% and 4.3% for residential; and 2.2% and 3.6% for government structures.

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