Construction Mixes Hot And Cold Employment

December 10, 2002
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Value put in place of numbers for tepid total.

Two indicators last week suggest construction is in a holding pattern overall, but with large differences between residential and nonresidential construction. The Bureau of Labor Statistics reported that seasonally adjusted construction employment in November, at 6,541,00, was virtually unchanged compared to October and to the previous six months. The figure was 88,000 (1.3%) below the year-ago number, compared to a decline of 0.2% in the entire economy.

General building contractors employed 2% more workers than in November 2001; heavy construction, except building, 4% fewer; and special trade contractors, 2% fewer. However, average weekly hours for construction workers slipped to 38.2 from 38.4 in October, 38.8 in September and 39.3 a year ago.

As a result, average weekly pay in the industry was virtually unchanged from a year before.

The seasonally adjusted value of construction put in place in October was $835 billion, up 0.2% from the revised September figure. The 10-month total was also 0.2% above the first 10 months of 2001.

Comparing 10 months of 2002 and 2001, private residential building construction (including improvements) was up by 6%, private nonresidential building construction was down by 17%, and public construction was up by 7%.

On a year-to-date basis, standout sectors included public educational (+14%) and transportation facilities (+10%), private health-care (hospital, medial building and special care, +13% combined), and multi-family housing (+11%, surprisingly higher than single-family, +5%). The big losers have been private manufacturing (-45%), office (-30%), lodging (-28%) and warehouse structures (-25%).

The Institute for Supply Management's monthly manufacturing and non-manufacturing indexes for November also continued their respective and divergent trends. The manufacturing index was at 49.2, the fifth month close to the 50 mark that signals no growth in manufacturing.

ISM says the November level, if sustained, indicates growth in gross domestic product of 2.4%. In contrast, the index of activity among 370 nonmanufacturing companies in 62 industries rose to 57.4 from 51-54 in August-October, suggesting accelerated growth. Construction was one of four industries reporting a decline in order bookings.

New orders for manufactured goods, seasonally adjusted, rose 1.5% in October, partially offsetting declines of 2.4% in September and 0.4% in August, Census reported Wednesday. Orders for construction machinery surged 10% following drops of 7% and 1%. Orders for construction materials and supplies edged up 0.2%, after gains of 0.5% and 0.1%.

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