Construction contracts flat in April; home sales rise

New construction contracts, seasonally adjusted, were essentially unchanged from March to April, McGraw-Hill Construction Dodge reported .

New construction contracts, seasonally adjusted, were essentially unchanged from March to April, McGraw-Hill Construction Dodge recently reported. The value of new contracts in the first four months of 2003 was 5 percent below the same period of 2002. Residential building contracts totaled 5 percent higher, nonresidential building contracts were down 11 percent, and nonbuilding contracts were off 21 percent.

A report by the National League of Cities on city budgets warned that "City policy makers are responding by raising user fees for services, drawing down reserves, laying off city staff, and dramatically cutting investment in infrastructure and maintenance ?infrastructure projects are still ready to go ... The federal government should use its pump-priming powers and provide municipalities with infrastructure support. If available, 76 percent of city finance officers say that their city would devote this support to infrastructure investment."

In addition, "The costs of borrowing have rarely been better for cities. Cities should borrow now, invest in infrastructure expansion, and pay off the costs later. In combination with federal support, city borrowing could help meet infrastructure needs and be a stimulus to the economy."

Seasonally adjusted single-family home sales rose in April, according to two reports. The government reported that new-home sales climbed to the third-highest level ever, up 1.7 percent from the revised March rate and up 12 percent compared to April 2002. The median sales price slipped 1.1 percent from a year ago.

The number of houses for sale was 3.9 times the number sold in April, down from 4.1 months in March and 4.3 months in April 2002, indicating strong demand for further new construction.

The National Assn. of Realtors reported that existing-home sales rose 5.6 percent to the fifth highest rate ever, 3.2 percent above the year-ago figure. The national median existing-home price was 6.8 percent higher than in April 2002. Inventories rose 10 percent from March to a 5.1-month supply.

Construction employment rose in 20 states, fell in 17 and was within 100 of March levels in 12 states and DC. Compared to April 2002, construction employment rose in 16 states and DC, fell in 29 and was within 100 in four. (Construction employment is not available for Hawaii.)

Mass layoffs (50 or more workers from a single establishment) fell for the 11th straight month in April, the Bureay of Labor Statistics reported. In construction, however, there were 10,000 workers involved in 150 mass layoff events in April, up from 7600 workers in 125 events in March and 9100 workers in 105 events in April 2002.

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

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