- MARKET SECTORS
- Al Levi: Managing Your Business
- John Siegenthaler: Hydronics Workshop
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- Julius Ballanco: Plumbing Primer
- Paul Ridilla: Practical Management
- Kenny Chapman: Blue Collar Coach
- Adams Hudson: Marketing Strategies
- Jim Hamilton: The Bottom Line
- Ray Wohlfarth: The Boiler Room
- Morris Beschloss: Beschloss Perspective
- Kelly Faloon: Editorial Opinion
- WEB EXCLUSIVES
Construction spending fell 0.6 percent in November 2009 to a seasonally adjusted annual rate (SAAR) of $900 billion, down 13 percent from November 2008 and the lowest total in six years, the Census Bureau reported. Private nonresidential spending was flat for the month but down 21 percent compared to a year earlier. Private power construction (power plants, renewable power, transmission lines, oil and natural gas facilities) climbed 2.7 percent for the month and 8.9 percent year-over-year.
But the 10 other private categories posted steep year-over-year declines, ranging from manufacturing, 0.1 percent for the month, -7.0 percent for the year; to private office, -2.2 percent and –39 percent; commercial (retail, warehouse and farm), -1.0 and –41 percent; and lodging, -1.5 percent and –46 percent.
Private residential spending fell 1.6 percent and 19 percent, the first time in several years that residential outperformed nonresidential over a 12-month span. New single-family construction increased for the sixth straight month, 1.3 percent, but was down 25 percent from a year earlier. New multifamily was off 4.1 percent and 44 percent, and improvements fell 3.9 percent and 2.8 percent.
Public construction spending slipped 0.4 percent for the month but climbed 2.7 percent from November 2008. The two largest public categories were mixed: highway and street, -2.9 percent and 5.7 percent; and educational, -4.4 percent and 12 percent.
UnemploymentUnemployment rates were higher in November than a year earlier in all 372 metro areas, the Bureau of Labor Statistics reported. Of the 369 areas for which payroll employment data were available, 354 reported year-over-year decreases, 14 had increases and one was unchanged. The largest 12-month percentage increases in employment were reported in Kennewick-Pasco-Richland, Wash., 3.8 percent; Danville, Va., 3.1 percent; Sandusky, Ohio, 2.6 percent; and Hinesville-Fort Stewart, Ga., 2.1 percent.
The largest over-the-year percentage losses in employment were reported in Grand Junction, Colo., -7.9 percent; Flint, Mich., -7.7 percent; Monroe, Mich., -7.6 percent; and Kokomo, Ind., and Naples-Marco Island, Fla., -7.5 percent each.
BLS also reported on employment in 32 metro divisions of 11 larger metro areas. Of these, only Bethesda-Rockville-Frederick, Md., reported a gain, 1.0 percent; the largest percentage loss was in Warren-Troy-Farmington Hills, Mich., -8.3 percent. Sustained gains suggest possible construction opportunities.
An analysis by AGC of 337 metro areas and divisions for which BLS reported construction employment (either alone or combined with logging and mining to prevent disclosure of data on industries with few employers) found employment fell from November 2008 to November 2009 in 324, was unchanged in seven and rose in six: Harrisburg-Carlisle, Pa., 12 percent (1,500 combined jobs); Anderson, Ind., 6 percent (100 combined jobs); Columbus, Ind., 5 percent (100 combined jobs); Tulsa, Okla. (700 construction jobs) and Bismarck, N.D. (100 combined jobs), 3 percent each; and Fargo, N.D.-Minnesota (100 combined jobs).
The largest 12-month percentage losses in construction jobs were in El Centro, Calif., -36 percent (500 combined jobs); Kokomo, -31 percent (500 combined jobs); and Wenatchee-East Wenatchee, Wash., -28 percent (800 combined jobs).
Wage IncreasesSettlements in newly negotiated construction labor agreements averaged $1.23 or 2.8 percent for their first year, the Construction Labor Research Council (www.clrcdata.org) reported in December, based on data it collected:
“The average second-year increase for multiyear agreements was $1.55 or 3.2 percent. Average increase declined; average duration increased; [and] a disproportionate amount of new money was allocated to pension funds. The average first-year increase dropped from 2008’s $1.95 or 4.6 percent. Average first-year increase had been in the range of 3.8 to 4.6 percent since 1999.
“The last time the average first-year increase was below 3 percent was 1996…almost 10 percent of negotiations…resulted in no increase in wages and fringes…the carpenters, the craft with the most workers covered by new agreements, had the lowest average increase…Bargaining has resulted in shorter contracts as well as lower settlements. Over half of new agreements were negotiated for one year. In recent years, they have been close to 40 percent with three-year agreements most prevalent.”
Construction is likely to bear a large share of cuts, as it is often politically easier to defer construction than to make cuts to current programs or payrolls.