Nov. Construction Spending, Job Losses Were Widespread; Wage Increases Diminish
January 8, 2010
fell 0.6 percent in November 2009 to a seasonally adjusted annual rate of
$900 billion, down 13 percent from November 2008 and the lowest total in six
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.
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.
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
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
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.
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.
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.
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).
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).
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:
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.
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
The number of mass
layoff events (involving 50 or more workers at one employer) dropped in
November compared to October and to November 2008, BLS reported on December 22.
The number of construction events and workers filing initial unemployment
claims fell nearly 20 percent from the year-ago month. Initial claimants
dropped by nearly one-half among employees of building contractors and nearly
one-fourth among heavy and civil engineering employees but were unchanged for
specialty trade contractors.
New orders for U.S. manufactured goods increased 1.1 percent in November
(SAAR), the seventh increase in eight months, the Census Bureau reported. Orders
for construction materials and supplies rose 0.9 percent, following a drop
of 0.8 percent in October. Orders for construction machinery, a very
volatile series, fell 3 percent in November and 30 percent in
worst recession since the 1930s has caused the steepest decline in state tax
receipts on record,” the Center on Budget and Policy Priorities (www.cbpp.org)
reported on December 18. “As a result, even after making very deep cuts, states
continue to face large budget gaps. New shortfalls have opened up in the
budgets of at least 39 states for the current fiscal year (FY 2010, which began
July 1 in most states). In addition, initial indications are that states will
face shortfalls as big as or bigger than they faced this year in the upcoming
2011 fiscal year.”
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