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Building Jobs, Spending Keep Growing

Monday, October 28, 2013

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U.S. construction unemployment hit a six-year low in September, on the heels of a four-year high in project spending the month before, the federal government reported.

Construction spending reached $915.1 billion in August—a slight increase from July and a 7.1 percent increase over August 2012, driven by a booming residential sector, the U.S. Commerce Department’s Census Bureau reported Tuesday (Oct. 22).

The increase was the fifth consecutive monthly gain, and spending hit its highest level since April 2009.

contractor
Associated General Contractors of America

Residential construction spending rose 1.2 percent in August from July's revised level. The segment is up 18.7 percent from a year ago, according to the Commerce Department.

The news was delayed three weeks by the federal government shutdown and does not include the shutdown period. That period forced many projects to hit the pause button, which could dim next month's construction reports considerably, industry officials warned.

Meanwhile, however, construction spending totaled $581.9 billion in the first eight months of this year, 5.9 percent above the same period in 2012

Private Construction Mixed

Spending on private construction edged up 0.7 percent in August from July’s revised level, to a seasonally adjusted annual rate of $640.5 billion, as residential construction spending rose 1.2 percent and nonresidential construction essentially held steady, up slightly at 0.1 percent.

Total private construction spending was 11.5 percent above August 2012 figures.

Residential Segment Surges

The residential segment was at a seasonally adjusted rate of $340.2 billion, fueled by single-family home and apartment construction spending. The booming segment was up 18.7 percent from a year ago.

Spending for new single-family homes was at $171.7 billion in August, a 28.2 percent increase from August 2012.

Spending for new multi-family construction reached $32.2 billion, a 37.5 increase from the same month a year ago.

Nonresidential private construction was at a seasonally adjusted rate of $300.3 billion in August, 0.1 percent increase above July's revised estimate.

The numbers for each area of construction were mixed, with commercial spending falling 0.8 percent from July’s revised levels and amusement and recreation increasing 5.4 percent from July’s level.

Public Construction Continues Decline

Public construction spending in August rose 0.4 percent from July, with educational construction spending dropping 1.3 percent and highway construction rising 0.1 percent.

highway construction
Federal Highway Administration

Public construction spending was $274.5 billion for August, down 1.8 percent from August 2012 levels. Highway construction spending rose 0.1 percent from July's revised level, but dipped 1.0 percent compared to last August.

Total public construction spending was $274.5 billion for August, which was down 1.8 percent from August 2012 levels.

Unemployment Rate Falls

Meanwhile, the Labor Department reported that construction employment rose by 20,000 in September and the industry’s unemployment rate fell to a six-year low of 8.5 percent, according to the Associated General Contractors of America.

The AGC says the industry’s unemployment rate dropped to the lowest September rate since 2007.

“The steep decline in the number of unemployed former construction workers suggests companies may have trouble finding experienced workers if the volume of projects continues to expand, as it did in August,” the group said.

Effects of Shutdown Loom

Association officials warned that the industry’s recovery would likely be affected by the federal government shutdown.

They urged federal officials to support water resources legislation currently being debated in Congress.

“Making long-delayed repairs to our aging ports and waterways will give the construction industry a needed boost and support broader economic growth,” said Stephen E. Sandherr, the association’s CEO.

   

Tagged categories: Associated General Contractors; Business matters; Commercial Construction; Construction; Economy; Government; Government contracts; Jobs; Market forecasts; Residential Construction; Residential contractors

Comment from marc chavez, (10/28/2013, 11:41 AM)

OK maybe I have not finished my first cup of coffee yet but the lead sentence does not jibe with the rest of the story? U.S. construction employment hit a six-year LOW in September, on the heels of a four-year high in project spending the month before. I believe you're missing the "un"


Comment from marc chavez, (10/28/2013, 11:42 AM)

sorry should have put your lead sentence in quotes


Comment from Mary Chollet, (10/28/2013, 12:07 PM)

Good catch, Marc, thanks. The story has been corrected.


Comment from Stacie Olson, (10/29/2013, 12:39 PM)

I can't help but wonder who is paying for the 17 plus people (I have the perception that there are more in the wings who didn't make it into the whot) who are standing around in the photo with arms crossed or hands in pockets. Hope this was a field trip for a construction class because I shutter at the unproductivity displayed here and hope it is not our tax dollars at work.


Comment from Jim Johnson, (10/29/2013, 12:54 PM)

A person really has to work to dope out the numbers in stories such as this. The problem is that the government contorts the numbers so much that it is almost impossible to find the truth without some insider help. For example, weekly unemployment claims have been hanging at about 350,000 per week for quite some time now. Grade school math tells us that equates to 1,400,000 people per month signing up for unemployment. At the same time the administration tells us what a great job they are doing to generate 120,000 jobs per month! Then...we found out that about 90% of all new hires since 2009 are part time! So about 10% of that 120,000 jobs, or 12,000 jobs, are actually full time work. So every month the number employed goes down by 1,280,000, adding to the roles of welfare, food stamps, etc. while we are told the economy is recovering! Anyone want to buy some beach front property in the Everglades? Then there is the unemployment rate. Back in December of 2011, at years end, they decided that to compute the unemployment rate they would no longer count those not looking for work. In one month, by doing that, the unemployment rate went down almost one full percentage point. How do they know how many quit seeking work? Just a guess made by whatever number it took to achieve the unemployment rate they wanted to announce. Now, each month they drop several hundred thousand people from the official unemployment count because they assume that many are no longer seeking work. Does it matter? Well, only to those who work to paint the most rosy picture they can by manipulating the data. So the government wants to create jobs, but they fail to acknowledge they have no money. All they have is taxpayer money, so they take it from us to generate a short term job that the Stimulus showed it cost us tax payers over $1,000,000 for every job created. Why didn't they just give each of us a check for $10,000 and we could have seen the economy soar. But then even the taxpayers could not provide that much money even if they had wanted to. Instead they borrowed and are going to let our grand children and great grand children worry about paying it back. So now our heirs are going to be paying for the 50% increase in the number of those on food stamps and welfare. Great economy huh? Now, these same politicians want to provide amnesty to 20 million illegals so that we and our heirs can provide them with free food, housing, medical care and education. Makes sense right? Since we only have about 58 million unemployed people, why not add 20,000,000 new job seekers? As long as they get to calculate numbers to obtain the result they want so they can tout how great a job they are doing most people will be too uninformed as to the real situation and will allow it to continue. If anyone can make sense of the "adjusted" numbers please let the rest of us know what they really are.


Comment from Chuck Pease, (10/29/2013, 7:54 PM)

You Go Jim J. Hard to argue these facts. Kudos brother for the keen eye on the math. Oh remember when it comes to the Feds they are a believer in " The Bigger The Lie, The More They Beleive"


Comment from John Fauth, (10/31/2013, 8:43 AM)

Jim, the "dark matter" of employment statistics is the labor participation rate. The percentage of Americans who are employed (and paying for those who are not employed) keeps dropping to the tune of hundreds of thousands per month. Put another way, two to five times (depending on the month) more people leave the employment market each month to become "takers", than those who find a job to become "makers". That kind of math is not sustainable for very long. Currently, the US labor participation rate stands at a 35 year low.


Comment from Jim Johnson, (11/1/2013, 1:12 PM)

John, I completely agree with you. The percentage of Americans who are employed is one number they have a hard time fudging on. According to one report I read, currently the percentage of working Americans is less than it was during the Great Depression in the 1930's. As you say, it is not sustainable for long, but the current Administration steadfastly refuses to do anything about it.


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