October Employment Lags Pre-Pandemic High In 33 States; Construction Starts Measures Diverge

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Submitted by the AGC

Seasonally adjusted construction employment in October trailed the February 2020 level in 33 states, exceeded it in 16 states and the District of Columbia, and was unchanged in Hawaii, according to AGC’s analysis of Bureau of Labor Statistics (BLS) data posted today. (February 2020 was the month in which employment peaked nationally before plunging during widespread shutdowns in March and April 2020.) Texas lost the most construction jobs over 20 months (-46,400 jobs or -5.9%), followed by New York (-42,800. -10%), and California (-21,300, -2.3%). Wyoming had the largest percentage loss (-14%, -32,600 jobs), followed by New York. Utah added the most jobs (8,200, 7.2%), followed by North Carolina (7,700, 3.3%), Washington (4,900, 2.2%) and Idaho (4,900, 8.9%). South Dakota added the highest percentage (10%, 2,500 jobs), followed by Idaho and Utah. For the month, construction employment increased in 34 states and D.C., declined in 14 states, and was flat in Alabama and Virginia. Louisiana had the biggest one-month numerical and percentage gain (8,200 jobs, 7.1%). California had the second-largest numerical gain (7,5000 jobs, 0.8%), while West Virginia had the second-largest percentage increase (2.3%, 700). South Carolina lost the most construction jobs for the month (-1,900 jobs, -1.7%), followed by Missouri (-1,500, -1.2%). New Hampshire had the largest one-month percentage loss (-2.2%, -600 jobs), followed by Vermont (-2.1%, -300). (BLS reports combined totals for mining, logging, and construction in D.C., Delaware, and Hawaii. Because there are few, if any, mining or logging jobs in these locations, AGC treats the levels and changes as solely construction employment.)

Two privately collected measures of construction starts showed contrasting results for October. Total construction starts rose 16% from September to October at a seasonally adjusted annual rate, data firm Dodge Construction Network reported on Wednesday. Over the first 10 months of 2021 combined, starts increased 13% compared to January-October 2020. Nonresidential building starts soared 29% for the month and 11% year-to-date. “The catalyst for the increase was a large gain in the manufacturing sector as two very large projects kicked off. If not for these projects, total nonresidential building starts would have been down 3% over the month.” Commercial starts increased 9% year-to-date; manufacturing starts, 94% “(39% without the large projects this month)”; and institutional starts, 3%. Nonbuilding starts jumped 52% for the month. “This increase was solely due to the start of an $8.5 billion LNG export facility, which lifted the utility/gas plant category significantly.” Nonbuilding starts rose 2% year-to-date: environmental public works, 22%; highway and bridge starts, -7; miscellaneous nonbuilding, -7%; and utility/gas plant starts, -10%. Residential starts fell 8% from September to October but rose 21% year-to-date, with single-family starts up 22% and multifamily starts up 10%.

Construction starts, not seasonally adjusted, tumbled 14%, not seasonally adjusted, from September to October but rose 5.8% year-to-date, data firm ConstructConnect reported on Tuesday. Nonresidential starts plunged 26% for the month and slipped 2.2% year-to-date. Nonresidential building starts decreased 36% for the month and 4.5% year-to-date, with commercial starts down 7.6% year-to-date, institutional starts down 9.8%, and industrial [manufacturing] starts up 34%. Heavy engineering (civil) starts slipped 0.8% for the month but increased 1.5% year-to-date (including road/highway, 7.3%; water/sewage, 8.1%; power and other miscellaneous, 4.8%; bridges, -19%; dams/marine, -14%; and airports, -9.7%). Residential starts climbed 2.1% for the month and 17% year-to-date (single-family, 21%, and apartments, 5.2%).

Housing starts (units) dipped 0.7% at a seasonally adjusted annual rate from September to October but inched up 0.4% year-over-year from the October 2020 level, the Census Bureau reported on Wednesday. Year-to-date starts for January-October 2021 rose 17% from the same months in 2020. Single-family starts slipped 3.9% for the month but climbed 17% year-to-date. Multifamily (five or more units) starts increased 6.8% for the month and 18% year-to-date. Residential permits rose 4.0% from September and 20% year-to-date, as single-family permits increased 2.7 % and 17%, respectively, while multifamily permits increased 6.5% and 27%. The number of authorized multifamily units that have not started—an indicator of potential near-term starts–jumped 49% year-over-year.

The Architecture Billings Index (ABI) slipped from 56.6 in September to 54.3 in October but remained above the breakeven mark of 50 for a ninth consecutive month, the American Institute of Architects reported on Wednesday. The ABI is derived from the share of responding architecture firms that report a gain in billings over the previous month less the share reporting a decline in billings, presented on a 0-to-100 scale. Any score above 50 means that firms with increased billings outnumbered firms with decreased billings. AIA commented, “although the pace of growth decreased modestly from that of the last few months[, the ABI} score of 54.3 means that business conditions remain generally strong, and that most architecture firms are still seeing billings growth. In addition, inquiries and the value of new design contracts, both indicators of future work at firms, strengthened in October, meaning that clients are continuing to both start conversations about new projects and are signing contracts to begin those projects in the coming months….The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.” Scores by practice specialty (based on three-month moving averages) topped 50 for the ninth time in a row: mixed practice, 58.7 (up from 58.0 in September); commercial/industrial, 57.4 (up from 56.3); multifamily residential, 55.8 (up from 55.0); and institutional, 51.4 (down from 52.8). The design contracts index climbed to 58.0 from 54.7. The inquiries index rose for to 62.9 from 61.8.

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