Simonson Says: Inching Toward a Turning Point - Video Message
Seasonally adjusted construction employment climbed or
held steady in 25 states plus the District of Columbia in May after rising in
30 states and staying level in one in April. Seventeen states posted
back-to-back gains, the best showing since the recession began.
AGC chief economist Ken Simonson provides a brief update on the state of the construction industry.
Another “best in show” was the number of states that had
year-over-year increases—five: Kansas (6.2 percent, or 3,600 jobs), North
Dakota (5.4 percent, 1,100 jobs), Arkansas (3.0 percent, 1,500 jobs), Alaska
(2.5 percent, 400 jobs) and New Hampshire (1.3 percent, 300 jobs). Most other
states had much smaller year-to-year declines than formerly. Even Nevada’s loss
of 23.0 percent (18,900 jobs) was better than its showing in April, when its
12-month job loss totaled 27.8 percent. And the nationwide drop was less than
half as steep as it had been a year ago—7 percent vs. 17 percent.
Construction employment in May was probably boosted by a
surge of spending on stimulus-funded highway projects. Other categories of
stimulus funding are beginning to translate into construction projects—water
and wastewater treatment plants, and retrofits of federal offices and
courthouses, for example.
On the residential side, spending on new single-family
homebuilding, which climbed 29 percent from the low point in May 2009 through
April, may be weakening, now that homebuyers are no longer eligible for a hefty
tax credit. New single-family starts and building permits both tumbled in May.
In contrast, multifamily starts and permits soared in May, although this series
is too volatile to declare the turnaround at hand yet.
Among nonresidential categories, hospital construction
seems to be the first to stir; several hospitals have broken ground around the
country in the past few weeks, with more announcing plans to do so. Colleges
may follow suit soon. A robust rise in factory utilization and orders should
stir the embers of manufacturing construction. However, developer-financed and
state and local government projects remain in a nosedive.
With such mixed data, it’s more likely that construction
can see the bottom than to say the industry has touched it and begun the long
climb back to ground level.