'Notable gains' in construction jobs, value put in place, orders outran overall economy
May 6, 2005

May 6, 2005
/ Print / Reprints /
/ Text Size+
A solid rise in construction employment in April made the lead paragraph in today's Congresional testimony by Bureau of Labor Statistics (BLS) Commissioner Kathleen Utgoff. “Nonfarm payroll employment rose by 274,000 [seasonally adjusted] in April, and the unemployment rate held at 5.2%. The increase in payroll jobs followed revised gains of 300,000 in February [revised from 243,000] and 146,000 in March [revised from 110,000]. Over the month, employment growth was widespread. Notable gains continued in construction, mining, food services, and health care….construction employment rose by 47,000, continuing the strong growth trend of the last two years. Most of April's increase occurred in specialty trade contracting (40,000), with gains in both its residential and nonresidential components.” From April 2004 to April 2005, total construction employment expanded more than twice as fast as overall nonfarm payroll employment (4.3% vs. 1.7%) to an all-time high of 7,209,000, a gain of 296,000. Growth was nearly uniform among the five BLS components: residential building, 6.7%; nonresidential building, 3.6%; heavy and civil engineering, 2.4%; residential specialty contractors, 4.1%; and nonresidential specialty contractors, 4.5%. Seasonally adjusted average hourly earnings in construction rose just 0.9% over that span, to $19.38 per hour, 21% higher than the all-industry average for production or nonsupervisory jobs.

The employment report reinforced the continued strength of construction shown in the Census Bureau's release on Monday of value of construction put in place in March, which set a 14th consecutive record of $1.052 trillion at a seasonally adjusted annual rate. For the first quarter of 2005 as a whole, construction exceeded the first-quarter 2004 total by 9%. Private residential construction was up 13% over the year-ago quarter, private nonresidential was up 7%, and public construction was 3% higher. The largest gains were in manufacturing construction, 31%; communication, 26%; lodging and multi-family construction, 16% each; and single-family, 14%. The broad commercial category climbed 9%, led by a 19% rise in multi-retail construction such as 'big-box” stores and shopping centers, and an 11% gain in warehouse construction. Of the two big public components, highway and street construction rose 10%; educational, 3%. Private power construction slumped another 7% from the year-ago quarter, although the smaller public power sector rose 17%.

A third indicator of construction growth appeared in Census's report on Tuesday on manufacturers' orders in March. Total orders (excluding semiconductor manufacturing) inched up 0.1%, seasonally adjusted, from February. The first-quarter total was 6.4% higher than in the first three months of 2004. Orders for construction materials and supplies climbed 1.6% for the month and 7.6% year-to-date. Orders for construction machinery plunged 15% in March, following a 5% drop in February. The quarterly total was 9.6% higher than in the same quarter of 2004.

Neither value put in place nor manufacturers' orders are adjusted for inflation. Last month, BLS reported that the producer price index for construction materials and components rose 8.2% from March 2004 to March 2005 and the index for construction machinery and equipment, 6.6%. This week, purchasing managers surveyed by the Institute for Supply Management, in releases covering manufacturing industries on Monday and nonmanufacturing on Wednesday, reported further price increases in April for aluminum and extrusions; asphalt/asphalt products and roofing products including felt, shingles, and insulation; copper, copper cable and wire; fuel, fuel surcharges, and freight; lumber and lumber products; steel and steel products. Price decreases were reported as well for steel and steel products, yet steel was cited in both reports as being in short supply. The nonmanufacturing report listed construction first (out of five industries) reporting the highest rates of increase in order backlogs, fourth for highest rates of increase in prices paid, and fifth for highest rates of slowing in supplier deliveries. But the industry was ranked 13th out of 14 reporting growth in business activity in April. One respondent was quoted, “Concern over interest rates, energy and materials costs has constrained capital plans for this construction season.”

New tables commissioned by the Small Business Administration's Office of Advocacy (www.sba.gov/advo) from Census show how the size distribution of construction firms changed from 2001 to 2002 (http://www.sba.gov/advo/research/dyn_us02.pdf). The total number of establishments (fixed locations) dipped 0.3% to 600,000. But employment dropped by 2.7% to 6.3 million. The number of establishments in tiny firms (firms with fewer than 10 employees), shrank by 1,500 (0.3%) to 462,000, but those firms added 127,000 employees (8%), bringing the total to 1,636,000. At the other extreme, there were 6,600 establishments in firms with 500 employees or more in 2002, an increase of 120 establishments (1.8%). But collectively, the giant firms reduced their employment by 67,000 (7%) to 897,000.

Did you enjoy this article? Click here to subscribe to Plumbing & Mechanical. 

Recent Articles by Ken Simonson

You must login or register in order to post a comment.



Image Galleries

2014 Truck of the Month

PM has featured so many great plumbing service trucks! See plenty of them here in our Truck Of The Month Archives page. Are you proud of your truck? Go to our Truck of the Month page to find out how your service truck could be chosen!

9/16/14 9:00 am PDT

Free Webinar: Acoustical Isolation

HOLDRITE will be hosting a free webinar for Acoustical Isolation on Tuesday, Sept. 16, 2014.

Plumbing and Mechanical

2014 August

2014 August

In the August issue of PM, read about the continued construction and renovations being made to hotels and restaurants. Find out the focus of this year's ISH China show will be, who made this month's Truck of the Month and read what Elkay has to say about their commercial construction expansion. Also, read the latest news and discover the newest products being used by professionals in the plumbing and mechanical industry.
Table Of Contents Subscribe

Back to School

It’s back-to-school time, how do you stay knowledgeable on the industry:
View Results Poll Archive

The Plumbing and Mechanical Store

2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Truck of the Month

Truck of the month

Are you proud of how your service truck looks? Do the graphics give people whiplash as they drive by? Have your calls increased because people remember your truck — and your company name? If so, we’d like to see it, too! Click here to find out how your service truck could be chosen as PM's Truck of the Month.



Connect to PM on Facebook Connect to PM on Twitter  Watch PM on YouTube    Connect to PM on Linked InGoogle+