March Employment Dives Overall But Construction Rises

Nonfarm payroll employment slumped again in March, falling by a seasonally adjusted 108,000, said the Bureau of Labor Statistics. The unemployment rate held steady at 5.8%. Data are from surveys covering the pay period that included March 12, a week before the war in Iraq began but after many reservists and National Guard were called up.

In addition, February's job loss was revised upward from an already huge 308,000 to 357,000, while January's gain swelled to 203,000 from 185,000.

In discussing the data, BLS Commissioner Kathleen Utgoff commented, "Construction employment edged up by 21,000 in March, following a decline of 42,000 in February. On net, employment in the industry has been unchanged since April 2002."

Compared to a year ago, nonfarm payroll employment is down by 293,000 (0.2%) for all industries and 50,000 (0.8%) in construction. The construction figures reflect a gain of 7,000 (0.5%) for general building contractors, a drop of 33,000 (3.6%) for heavy construction, except building, and a drop of 24,000 (0.6%) for special trade contractors.

Seasonally adjusted average weekly hours in construction rose from 37.4 in February (perhaps depressed by widespread bad weather) to 39.1 in March, matching the March 2002 figure. Average hourly earnings, seasonally adjusted, were unchanged from February to March at $19.16, an increase of 2.2% from March 2002.

Construction was among six sectors reporting increased business activity, while eight reported decreased activity and two were unchanged from February. Construction was one of five sectors reporting the highest rates of new orders and one of three with growth in backlog of orders.

Construction put in place edged down to $872 billion, seasonally adjusted, in February, down 0.2% from January and from February 2002, the Census Bureau reported. Private residential construction was up 0.6% for the month and up 10% from a year before. Private nonresidential building construction rose 0.3% for the month but was down 13% from February 2002. Public construction slid 2.9% from January and 5% from the year-ago number.

One reason for the seesaw private nonresidential figures was electric power construction: up 3.6% for the month but down 15% from February 2002. For the past 3 months, this figure has been down by 13-15% from the year-before level, reflecting the drought of new starts as projects are finished.

On April 2, USA Today reported that El Paso Merchant Energy had abandoned plans to build a gas-fired power plant in Muskego, Wisc., citing "an inability to make deals to sell the power that would have been generated."

Orders for construction materials and supplies dropped 2.2% in February, following a fall of 0.5% in January and an increase of 0.1% in December. Orders were up 2% from February 2002. Orders for construction machinery dove 5.9% in February and 10.3% in January after a 5.4% surge in December. They are down 4.1% from a year ago.

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Chief Economist, Associated General Contractors of America 703-837-5313; fax -5406; www.agc.org

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