Two-Thirds of Metros Add Jobs in Past Year
Submitted by AGC.
Construction spending rose by 0.2% from an upwardly revised September rate to a seasonally adjusted annual rate of $1.60 trillion in October, the Census Bureau reported on Wednesday. Monthly increases in 14 of the 16 nonresidential categories more than offset decreases in residential spending. However, the opposite pattern held for year-to-date spending in the first 10 months of 2021, which rose 7.5% from the total for January-October 2020. Private residential construction spending declined for the third time in the past four months, by 0.5%, but soared 24% year-to-date (single-family, 36% year-to-date; multifamily, 17%; and owner-occupied improvements, 12%). Nonresidential activity climbed 0.9% for the month but was down 4.7% year-to-date. Public construction spending jumped 1.8% for the month but was 4.8% lower year-to-date. The largest public segment, highway and street construction, rose 2.4% from the prior month but trailed by 0.9% year-to-date. Public education construction edged up 0.2% for the month but slumped 7.6% year-to-date. Public transportation construction rose 1.7% from September but lagged the 2020 year-to-date total by 6.3%. Private nonresidential construction spending inched up 0.2% for the month but trailed by 4.6% year-to-date. The largest private nonresidential segment (ranked by year-to-date spending)—power—fell 0.6% and 3.3%, respectively (including electric power, -2.1% year-to-date, and oil and gas field structures and pipelines, -7.1% year-to-date), followed by commercial, down 0.1% for the month but up 2.6% year-to-date (including warehouse, 14% year-to-date, and retail, -12% year-to-date); manufacturing, up 0.3% for the month and up 2.8% year-to-date; and office, 0.2% and -7.9%, respectively. Lodging had the largest year-to-date decrease, -32%.
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Construction employment, not seasonally adjusted, rose from October 2020 to October 2021 in 236 (66%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 72 (20%) and was unchanged in 50, according to an analysis AGC released on Tuesday. (BLS reports combined totals for mining, logging, and construction in most metro areas, to avoid disclosing data about industries with few employers; AGC assumes the construction-only changes in these areas match the combined change.) The largest losses again occurred in the Nassau County-Suffolk County, N.Y. division (-6,700 combined jobs, -8%) and New York City (-4,200 combined jobs, -3%), followed by the Orange-Rockland-Westchester counties, N.Y. division (-3,600 combined jobs, -8%); the Dallas-Plano-Irving division (-2,800 combined jobs, -2%); and the Calvert-Charles-Prince George’s counties, Md. division (-2,600 combined jobs, -8%). Evansville, Ind.-Ky. again experienced the steepest percentage decline (-17%, -1,700 combined jobs), followed by Altoona, Pa. (-13%, -400 combined jobs); Watertown-Fort Drum, N.Y (-11%, -200 combined jobs); and the Gary, Ind. division (-10%, -1,700 construction jobs). Sacramento–Roseville–Arden-Arcade again added the most jobs (6,800 construction jobs, 9%), followed by the Boston-Cambridge-Newton division (6,600 combined jobs, 9%); Orlando-Kissimmee-Sanford (6,400 construction jobs, 8%); the Seattle-Bellevue-Everett division (5,500 construction jobs, 5%); and Pittsburgh (5,200 construction jobs, 9%). Worcester, Mass.-Conn. had the highest percentage increase (20%, 2,000 combined jobs), followed by Beaumont-Port Arthur, Texas (19%, 3,200 combined jobs); Sioux Falls, S.D. (19%, 1,800 combined jobs); Atlantic City-Hammonton, N.J. (16%, 800 combined jobs); and Sierra Vista-Douglas, Ariz. (15%, 500 combined jobs). Eight areas set new lows for October and 50 set new highs, in series dating in most cases to 1990.
Price movements for construction inputs have become variable, in contrast to the across-the-board increases earlier in the year. Commercial Metals Company notified customers on Monday, “Effective immediately, we are increasing the transactional price for reinforcing steel products from our East Region Mills in South Carolina, Florida, Tennessee & New Jersey, $30/ton.” New South Construction Supply reported on November 23, “Wire mesh continues this year’s historic climb, and another price increase [of $80/ton] was pushed through on November 10….Mesh prices have more than doubled since November of 2020….Lead times on newly placed orders are still running three to four months before delivery. Rebar also saw…a $40 per ton increase effective” on October 29. The Commerce Department announced on November 24 that it the U.S. would retroactively double the duty on Canadian softwood lumber, from 9% to 18%. The January futures price for lumber on the CME exchange closed on Wednesday at $869.50 per thousand board feet, a $333 (62%) increase since November 15. In contrast, the near-month copper futures price closed on Wednesday at $4.27/pound, a drop of almost 10% from the near-record level of $4.73 on October 20. The national average retail price of on-highway diesel fuel on Monday was $3.72 per gallon, a dip of 1.4 cents from the seven-year high set on November 15 but $1.22 (49%) higher than a year ago, the Energy Information Administration reported on Monday.
“Economic activity grew at a modest to moderate pace in most Federal Reserve Districts during October and early November, the Federal Reserve reported on Wednesday in the latest “Beige Book,” a compilation of informal soundings of businesses by the 12 regional Federal Reserve Banks. “Construction activity generally increased but was held back by scarce materials and labor.”