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Construction jobs leveled off in January; value put in place, orders ended 2004 strong

February 4, 2005
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Nonfarm payroll employment grew in January by 146,000, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported today. Gains for the previous three months were revised downward. Nevertheless, employment in January set a record of 132,573,000, finally surpassing the pre-recession peak reached in February 2001.

BLS Commissioner Katheen Utgoff noted, “Construction employment was little changed in January, after seasonal adjustment. Adverse weather may have held down employment in the industry during the month. Since its recent low in March 2003, construction has added 407,000 jobs.” In the last 12 months alone, construction added 220,000 jobs (3%). Annual “benchmark” revisions raised the total for December 2004 to a record 7,074,000, with January 2005 estimated at 7,065,000. With this report, BLS began issuing monthly counts for residential and nonresidential building and specialty trade contractors.

In January, seasonally adjusted employment totaled 926,000 in residential building (up 59,000 or 7% from January 2004), 753,000 in nonresidential building (up 24,000 or 3%), 898,000 in heavy and civil engineering (down 5,000 or 0.6%), 2,117,000 in residential specialty trade contactors (up 61,000 or 3%), and 2,372,000 in nonresidential trades (up 81,000 or 4%).

Average hourly earnings in construction over the past 12 months rose just 14 cents (0.7%) to $19.21, seasonally adjusted, probably because the mix of employees shifted more to lower-paid residential building workers. The average in construction was 21% above the all-industry average for production workers.

BLS released data Wednesday on metropolitan area employment in December (www.bls.gov/sae). The release noted, “Over the year, employment growth was most widespread in education and health services, with 230 of 274 metropolitan areas experiencing job gains in this industry sector. Many areas also experienced employment growth in leisure and hospitality; construction; and professional and business services.”

The value of construction put in place in December reached $1.032 trillion at a seasonally adjusted annual rate, the Census Bureau announced Tuesday. That was a 1.1% gain over November's upwardly revised total. It marked the 11th straight increase and brought the annual total for 2004 to $998 billion, 9% more than in 2003. Gains were widespread, with yearend acceleration in many categories. For the year, private residential construction rose 14%, private nonresidential construction 4%, and public construction 3%. Within residential, single-family gained 19%, multi-family 9%, and improvements 3%. Within private nonresidential, lodging was up 19%, health care 10%, retail (automotive, food/beverage, multi-retail, other commercial) 9%, office 6%, communication 5%, and manufacturing 2%. Electric power construction fell 11%, warehouse construction 6%, and private educational 3%. Within public construction, the two major components, educational and highways, each rose a little less than 4%. Sewage and waste disposal and public office construction each rose 7%; public transportation facilities climbed 2%. Declining public construction components included amusement and recreation, -8%, public safety, -7%, and water supply, -0.9%.

Orders for construction materials and supplies rose 0.3% for the month and 13% for 2004 as a whole to $476 billion (11% of total orders). Construction machinery orders slipped 0.6% in December but surged 44% for the year as a whole to $31 billion (10% of total machinery orders).

This week, two automakers announced factory expansions. “Chrysler said it will invest $419 million in its Belvidere, Ill., assembly plant…to overhaul the plant's body shop and make adjustments to the paint shop and final assembly area. GM said [it] is investing about $175 million to prepare its Fort Wayne, Ind., truck-assembly plant for full-size pickup truck production,” the Wall Street Journal reported.

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