Construction job gains led February employment report; U.S., Mexico sign cement deal

Nonfarm payroll employment increased 243,000, seasonally adjusted, in February, the Bureau of Labor Statistics (BLS) reported. Construction employment rose by 41,000, or one out of every six new jobs (one out of five private-sector jobs), to 7,512,000. Over the past 12 months, construction employment increased 346,000 (4.7%), triple the growth rate for all nonfarm payroll jobs (1.5%). Employment rose for the month and year in all five construction categories: residential and nonresidential building (3.9% and 3.2%, respectively, over 12 months), residential and nonresidential specialty trades (7.6% and 2.2%), and heavy and civil engineering construction (7.2%). Some of the growth might be attributable to projects begun in the mild, dry weather of January or levee reconstruction work in New Orleans, but the growth is consistent with monthly rates throughout the last year or more. Seasonally adjusted average hourly earnings for construction workers rose 2.2% over the past 12 months to $19.70 per hour in February. That was 20% higher than the $16.47 average for all private nonsupervisory or production workers.

A new report from the Construction Labor Research Council on union wage and fringe increases supports the BLS data on modest wage gains in construction. The report found that rates rose by 3.9% in 2005, comparable to the 4% increase in 2004. “Based upon the increases already negotiated in [close to 600] contracts for the next two years, wage and fringe increases will continue at a similar pace. Already known increases in effect for both 2006 and 2007 are 3.9%.” Responses to last week's Data DIGest questions about changes in construction labor market tightness and compensation varied widely, even within a metro area. Construction employment has risen nationwide, as shown by the data for January that BLS released regarding state employment by industry. Compared to January 2005, construction employment rose in 46 states, was virtually unchanged in Vermont, and fell in only three states - Louisiana (-10%), Michigan (-1%), Connecticut (-0.9%), and the District of Columbia (-2%). The largest percentage increases were in Idaho (17%), Nevada (16%), Hawaii and Mississippi (14% each), Arizona and Kansas (13% each). The disparate results for Louisiana and Mississippi reflect big differences in physical conditions, business and government responses following Hurricane Katrina. In Mississippi, debris clearing and rebuilding began immediately, aided by quick passage of a state law to allow casinos to relocate 800 feet in from their former coastal positions.