Special Report: 7.30.2009

CONSTRUCTION & EC EMPLOYMENT
…Down 15.2% & 11.9%, Respectively

Construction field workers—employment of folks as “production workers” (field people) in June averaged 4,904,000, according to the Bureau of Labor Statistics (BLS). That figure is subject to two revisions.
June 2008 was 5,785,000; before revisions, the June 2009 number is down 15.2%.

Electrical contractor field workers—subcontractor industry reports on employment from BLS are always one month behind the “big” construction number. The May 2009 figure for Electrical Contractors was 635,900 (subject to one revision), according to the BLS.

May 2008 was 721,600, so the May 2009 figure is down almost 11.9%.

Looking ahead: The consensus of construction economic forecasts calls for total nonresidential to be down 15.8% this year. But a lot of that forecasting involves “the dollar value of contracts for new construction.”

What’s actually happening? As of the most recent Census report, the not-seasonally adjusted construction spending total for private nonresidential was down only 2.6%.

Partial conclusion: The number and size of projects starting in this year’s second half isn’t going to replace the number/size of nonresidential work being completed. Thus, it’s a reasonable guess to think (absent a sudden boom in residential) that employment in construction overall and in electrical contracting is going to take a hit in the coming months.

Looking further ahead: That consensus forecast, assembled by the AIA’s chief economist, shows the consensus forecast for an 11.6% drop in nonresidential construction in 2010.

Where is the silver lining? While the stimulus promises to do little for nonresidential construction (or housing, for that matter), there are funds bouncing around to support energy-smart retrofits. The electrical distribution business might not be hit as hard as others.

DISTRIBUTORS SHED WORKERS—
Every Month Since July 2008

While over at the BLS database, I found figures on employment in NAICS 42361, wholesale trade, electrical equipment, and wiring. I’m not sure how exacting the U.S. government is about counting, but here are the past 10 years of numbers, month-by-month:

Series Id:         CEU4142361001
Not Seasonally Adjusted
Super Sector:  Wholesale trade
Industry:          Electrical equipment and wiring
NAICS Code:    42361
Data Type:       ALL EMPLOYEES, THOUSANDS

Notes:

1. The (P) in the May 2009 cell means “preliminary” (or “subject to revision”).

2. Unlike the numbers for construction and the EC business above, I chose “All Employees,” not just production workers.

3. These numbers are in thousands, so the figure for May 2009 is 140,500.

4. May 2009 is down 8.7% from one year earlier.

5. According to the month-by-month run-down, employment in electrical distribution has fallen every month since July 2008. The total decline: 9.6%.

GREEN STUFF @ NECA
…Includes Distributor Speakers

Disclaimer: I’m not here to promote NECA. But I do a small amount of work for NECA’s Electrical Design Library and work as coordinator for the NECA-IBEW joint marketing organization. It’s important that you know all that before reading what follows.

Looking over the NECA Seattle brochure (the event is in mid-September), you’ll find an incredible amount “green” stuff from electrical distributor personnel:

Data Center Business Opportunities—Karl Griffith of Graybar presents two 50-minute sessions.

Great Tools For Your Business: NAED’s Green Guides and TED’s Green Room—the presenter for this 50-minute session is Ed Orlet of NAED.

Finding Green Projects—Jeff Pecoroni of Gexpro handles this 50-minute workshop.

Also on the agenda:

• A day-long session that will teach contractors about energy auditing
  
  
• A two-hour session that also covers energy audits
  
  
• Four hours on LED technology (speaker from Color Kinetics)
  
  
• Four hours on “Fundamentals of LEED” (taught by Erica Paul of Rosendin Electric, who spoke two years ago at the NAED Leadership Summit)
  
  
• Four hours on Key to Business Success in Solar PV (taught by Bernie Kotlier of the Los Angeles NECA-IBEW marketing group. He spoke on the same panel with Ms. Paul)
  
  
• Four hours on Entering the Green/Intelligent Building Market (co-presenter is Marty Riesberg of the NECA-IBEW national training program, who spoke in 2007-2008 at three NAED regional meetings on “Smarter, Greener Buildings”)

There are also five short, additional segments on green (one of which is presented twice) and a two-hour preshow event presents the finalists in the Green Energy Challenge, pits NECA’s student chapters against each other. Counting the dupes, that’s 15 green events.

CANADIAN SHAKING
…And Baking!

Canada has a new electrical magazine, Distribution & Supply. Rick McCarten, vice president of the S&D Council (Electro-Federation Canada), has a column in the thing.

To see it, go here and “page” through the issue back to page 26 (of 28 pages). He wrote about “ChannelVision,” an effort to collect information “biweekly via e-mail.” Note:

“One of the questions we have asked, ‘When are people going to retire?’ provided valuable industry insight: 50% said before 2020, at a fairly steady pace. So while we may have known the industry is losing some Baby Boomers, we now know our members have a fairly good picture of the exact rate.”

STUFF YOU SHOULDN’T MISS
Linkfest #1

George Krauter who—according to the bio on the site—“is the originator of the concept that became integrated supply”—blogs on MRO stuff for your customers, on the site of Purchasing magazine. His June 1 entry starts with: “There is a change taking place in the world of MRO in that total cost of ownership [TCO] considerations are becoming the focus of supplier selections.”

CE Pro’s “Ultimate Guide to Distribution 2009,” which provides info on 206 distributors, “including 39 that upgraded to share shipping policies, credit terms, product mixes, and even their Twitter accounts.”

Randy Guba, CFO of contractor IES, talks about how the management team there (new as of two years ago) worked to transform the company. The Q&A is 4,000-plus words (and distributed over six web pages).

NECA’s Energy Solutions blog had a post July 17 on DIY Solar Panels.

As you might know, healthcare construction has been a bright spot (even when things were a lot brighter). Jim Haughey, chief economist for Reed, wrote on July 21 that the current debate about how to reorganize/pay for healthcare in the United States is going to cause a decline in the next six months “as much due to the uncertain market environment as it is to the recession.” Then, he says, it’s back to 10% annual growth!

U-6 UNEMPLOYMENT RATE
—Perhaps It’s Worse Than 1931?

According to the Bureau of Labor Statistics, national unemployment was over 20% in each of the years 1932-33-34-35 (see table on this web page). In 1931, at the beginning of The Great Depression, BLS data show the national rate averaging 15.9%.

If we’re embarking on another (albeit somewhat different) version of this economic disaster—we might not be, but if we are—we’re probably in the equivalent of 1931. So, where are we, unemployment-wise?

For an answer, I look to the U-6 unemployment rate. It can be found on page 20 (bottom, Table A-12) of the 30-page (PDF) June employment report.

What’s “U-6,” anyway? It’s an approximation (I think) of how unemployment used to be figured (back in, say, 1931). It is the percentage reached by adding:

1. Total unemployed, plus
2. All “marginally attached” workers (not counted in the headline unemployment numbers), plus
3. Total employed part-time for economic reasons (i.e., people who want full-time work but can’t find it).

Here are seasonally Unadjusted U-6 figures for 2009 so far:

Jan.      15.4%
Feb.     16.0%
Mar.     16.2%
Apr.     15.4%
May     15.9%
June     16.8%

According to the most recent report, there were in June:

2,176,000 workers who were marginally attached to the labor force (up 618,000, or 40%);
9,301,000 working part-time for economic reasons (up 3.6 million, or 63% from June 2008); and
14,729,000 unemployed (up 6.23 million, or 73%).

That’s 26 million people wandering around our economy, looking to DO something productive with their time. Are we going to match (or exceed) the 1931 unemployment rate? It would seem so.

	Joe Salimando of EFJ Enterprises is a consultant, web content provider, and wordsmith based in Oakton, Va. To contact him, call 703-255-1428. See also The EleBlog.
Personal Disclaimer: The appearance of the ambling pachyderm is indicative of the writer’s obsession with elephants, not his political leanings.
IMPORTANT NOTE: THIS COLUMN REFLECTS ONLY THE OPINIONS OF ITS AUTHOR AND DOES NOT REFLECT THE OPINIONS OR POLICIES OF NAED, TED MAGAZINE, OR THE ADVERTISERS ON THE TEDMAG WEB SITE.