More states add construction jobs; contractors, forecasters expect limited gains in 2012

Posted by tED magazine on Friday, January 27, 2012

By Ken Simonson

View state construction employment tables by rank or by state. Click here to view the 2012 Construction Hiring and Business Outlook.

Seasonally adjusted nonfarm payroll employment increased in 25 states and the District of Columbia in December, decreased in 24 states, and was unchanged in Montana, the Bureau of Labor Statistics reported on Tuesday. Over the year, employment increased in 46 states plus D.C. and decreased in 4 states: Delaware, -0.7%; Alaska, -0.5%; Georgia, -0.4%.; and Missouri, -0.1%. The largest year-over-year percentage gains were in North Dakota, 5.7%; Utah, 3.0%; and Oklahoma, 2.7%. Construction employment rose in December in 23 states, fell in 24 plus D.C., and was flat in Connecticut, Mississippi and Maine. Over the year, construction employment rose in 28 states plus D.C. (the most places with gains since November 2007), fell in 21 and remained unchanged in North Carolina. The largest 12-month percentage gains in construction employment were in North Dakota (24%, 5,100 jobs); Indiana (12%, 13,600 jobs); and West Virginia (10%, 3,000 jobs). California added the largest number of jobs during the year (21,300 jobs, 3.9%), followed by Indiana. The steepest declines occurred in New Mexico (-14%, -6,000 jobs); Delaware (-6%, -1,100 jobs); and Georgia (-5%, -6,400 jobs). The largest number of jobs disappeared in Georgia, Texas (-6,300 jobs, -1.1%) and New Mexico. (BLS combines mining and logging with construction to prevent disclosure of data in industries with few employers in Delaware, New Mexico, four other states and D.C.)

The 1,305 contractors who responded to the AGC of America/Computer Guidance Corporation 2012 Construction Outlook Survey expressed mixed views about the outlook for construction, AGC reported on Monday. Only 12% of respondents said they "expect the construction market to grow again" in 2012; 36% picked 2013; 34%, 2014; and 18%, 2015. As to whether the dollar volume of projects they compete for in 2012 would be higher or lower, there were only two segments (out of 10) in which more respondents expect an increase than a decrease: power (31% expect higher volumes and 22% expect lower volumes, for a net of +9%) and hospital/higher education (34% higher, 26% lower, net of +8%). Expectations were especially negative for all public segments: highway, net of -21%; K-12 school, -23%; other transportation, -24%; and public building, -27%. Yet they remain upbeat about their own firms: 32% plan to hire in 2012, while only 9% expect layoffs.

The American Institute of Architects (AIA) "Consensus Construction Forecast Panel is projecting very modest growth overall for 2012," AIA Chief Economist Kermit Baker reported on January 20. "Total nonresidential [building] activity is forecast to increase just 2% in 2012 over 2011 levels, with somewhat stronger growth in the commercial and industrial sectors, but no growth in institutional activity. The hotel market is expected to see the most growth in the commercial arena, bouncing back from a steep slide in 2011. The healthcare market is expected to be one of the strongest institutional construction sectors. A modest recovery in 2012 is projected to turn into a stronger upturn by 2013. Overall, nonresidential [building] spending is forecast to increase by more than 6% next year, again with stronger numbers on the commercial and industrial side. Again, hotel construction is expected to pace the commercial/industrial upturn. The institutional sector is also poised for a significant upturn in 2013. Overall growth for institutional facilities is forecast at almost 4%, with healthcare again expected to be one of its strongest sectors."

"New construction starts in December fell 3% [at] a seasonally adjusted annual rate," McGraw-Hill Construction (MHC) reported on Monday, based on data it collected. "For all of 2011, total construction starts slipped 2%, [following a] 1% gain reported for 2010. After the steep declines reported during the 2007-2009 period, when activity dropped a combined 38%, the overall volume of new construction starts has essentially stabilized at a low level during the past two years." Nonresidential building held steady in December and dropped 4% for the year. Residential building rose 2% for both periods. Nonbuilding construction fell 10% in December, "as electric utilities retreated from the record pace witnessed earlier in the year," and slipped 3% for the year. MHC vice president of economic affairs Robert Murray said, "Gains for a few project types are being offset by continued weakness for other project types, with the result that total construction is experiencing an extended bottom. During 2011, stronger activity was reported for multifamily housing, manufacturing plants, electric utilities, and even some commercial property types (hotels and warehouses). These gains were countered by further declines for the publicly financed parts of the construction industry, institutional building and public works, as well as by more weakness for single-family housing. For 2012, it's expected that there will also be a mixed pattern by project type."

The value of nonresidential starts rose 4.1%, not seasonally adjusted, in December and 11% for the year, Reed Construction Data reported on Tuesday, based on data it collected. Nonresidential building starts rose 18% for the month and 14% for the full year. Heavy engineering starts tumbled 19% from November but climbed 6.4% for the year.

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