November Private Construction Spending Rises, Public Dips

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Submitted by the AGC.

Construction spending rose by 0.4% from an upwardly revised October rate to a seasonally adjusted annual rate of $1.63 trillion in November, the Census Bureau reported on Monday. Private residential and nonresidential spending both posted monthly and year-over-year (y/y) increases, while public construction spending declined. Year-to-date spending in the first 11 months of 2021 climbed 7.9% compared to the total for January-November 2020. Private residential construction spending increased 0.9% for the month, 16% y/y, and 24% year-to-date (single-family rose 34% year-to-date; multifamily, 16%; and owner-occupied improvements, 13%). Private nonresidential construction spending increased by 0.1% for the month and 6.7% y/y but trailed by 4.6% year-to-date. The largest private nonresidential segment (ranked by year-to-date spending)—power—rose 0.1% for the month but declined 0.5% year-to-date (including electric power, up 0.6% year-to-date, and oil and gas field structures and pipelines, down 4.3% year-to-date), followed by commercial, down 0.1% for the month but up 3.9% year-to-date (including warehouse, up 15% year-to-date, and retail, down 10% year-to-date); manufacturing, up 0.9% for the month and 5.5% year-to-date; and office, unchanged for the month and down 7.1% year-to-date. Lodging had the largest year-to-date decrease, -32%. Public construction spending dipped 0.1% for the month and 4.3% year-to-date. The largest public segment, highway and street construction, slipped 0.8% for the month and 0.3% year-to-date. Public education construction edged up 0.3% for the month but slumped 7.5% year-to-date. Public transportation construction declined 0.5% from October and 5.7% year-to-date.

Construction employment, not seasonally adjusted, rose from November 2020 to November 2021 in 237 (66%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 74 (21%) and was unchanged in 47, according to an analysis AGC released on December 22. (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 loss again occurred in the Nassau County-Suffolk County, N.Y. division (-6,300 combined jobs, -8%), followed by the Orange-Rockland-Westchester counties, N.Y. division (-3,900 combined jobs, -9%); the Calvert-Charles-Prince George’s counties, Md. division (-2,700 combined jobs, -8%); Houston-The Woodlands-Sugar Land, Texas (-2,600 construction jobs, -1%); and Nashville-Davidson–Murfreesboro–Franklin, Tenn. (-2,600 combined jobs, -5%). Evansville, Ind.-Ky. again experienced the steepest percentage decline (-18%, -1,800 combined jobs), followed by Leominster-Gardner, Mass. (-14%, -300 combined jobs); Anchorage, Alaska (-11%, -1,100 combined jobs); Altoona, Pa. (-10%, -300 combined jobs); and Florence-Muscle Shoals, Ala. (-10%, -400 combined jobs). Sacramento–Roseville–Arden-Arcade again added the most jobs (7,300 construction jobs, 10%), followed by the Seattle-Bellevue-Everett division (7,000 construction jobs, 7%); the Chicago-Naperville-Arlington Heights division (6,500 construction jobs, 5%); the Boston-Cambridge-Newton division (6,200 combined jobs, 8%); and Minneapolis-St. Paul-Bloomington, Minn.-Wis. (6,100 combined jobs, 7%). Sioux Falls, S.D. had the highest percentage increase, 19% (1,800 combined jobs), followed by three metros with 16% increases: Beaumont-Port Arthur, Texas (2,700 combined jobs); Atlantic City-Hammonton, N.J. (800 combined jobs) and Waterbury, Conn. (500 combined jobs). Eleven areas set new lows for November and 45 set new highs, in series dating in most cases to 1990.

There were 345,000,000 job openings in construction, seasonally adjusted, at the end of November, or 4.4% of total openings plus employment, the BLS reported today in its latest Job Openings and Labor Turnover Survey (JOLTS) release. Openings jumped 32% y/y, and the number and rate of openings rate were the highest for any month in the 21-year history of the series, an indication of the difficulty contractors are having in filling positions. Hires totaled 423,000, an 8.7% increase y/y.

In a hopeful sign for construction employment, “education for the skilled trades appears to be returning to fashion, according to enrollment trends, survey data and other signals,” The Hechinger Report, a national nonprofit newsroom focused on education, reported on Friday. “In Utah, enrollment rose in the fall at seven of the state’s eight technical colleges, according to the Utah System of Higher Education. South Dakota’s Lake Area Technical College saw an 8.1% increase. The number of people training for the trades at Georgia Piedmont Technical College rose 13% this fall over last fall, the college says….And the career colleges run by ECMC Group, in Georgia, Florida and Texas, reported a collective 20% increase in the number of students last year and 16% this year. Those figures are particularly noteworthy against the backdrop of a nearly 8% decline in overall undergraduate college and university enrollment in the last two years, according to the National Student Clearinghouse Research Center.” The clearinghouse reported on November 18, “Undergraduate enrollment has declined across all institution sectors. Enrollment decreases in public four-year and private for-profit four-year institutions were steeper than last fall. This fall, public four-year institutions declined 2.5% vs a 1.6% loss last fall. Private for-profit four-year institutions this fall dropped 8.5% vs a 2.6% drop last fall. Enrollment at private nonprofit four-year institutions remained largely stable (-0.6%) while community college enrollment continued to fall, but at a slower rate than last fall (-6.0% vs. -9.4% last fall). Community college enrollment is now down a total of 14.8% since 2019.” These declines imply that the 14% year-to-date downturn in higher-education construction spending is likely to continue in 2022.

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