Private-Sector Employment Rose Again In December
Data DiGest reported that "Nonfarm payroll employment rose by 103,000, seasonally adjusted, in December, the Bureau of Labor Statistics (BLS) reported on Friday. Private-sector employment rose for the 12th month in a row, by 113,000, bringing the year-over-year gain to 1,346,000 (1.3%).
Construction employment fell 16,000 in December to 5,603,000, only 18,000 above the low point last February. Industry employment dropped in eight out of 12 months last year and ended the year 93,000 (-1.6%) below the December 2009 mark. Results were mixed by segment: employment in heavy and civil engineering construction fell 1.5% for the month but climbed 2.3% year-over-year, probably reflecting unseasonably bad mid-December weather offsetting some of the yearlong strength in federal stimulus, military base realignment and Gulf Coast hurricane-related work.
Nonresidential building construction employment edged down 0.1% in December but ticked up 0.8% year-over-year; nonresidential specialty trade contractors, 0 and -1.7%; residential specialty trade contractors, +0.3% and -2.8%; and residential building, -1.0% and -6.2%. Architectural and engineering services employment, a harbinger of future demand for construction, dipped 0.1% and 1.3%. The unemployment rate in construction was 20.7%, not seasonally adjusted, down slightly from 22.7% a year earlier but more than double the overall unemployment rate of 9.1% (9.4%, seasonally adjusted; BLS does not present adjusted rates by industry). Average hourly earnings in construction crept up 4 cents to $25.40, seasonally adjusted, a gain of 37 cents (1.5%) from December 2009.
“Every state and 98% of the nation’s metro areas will see at least small job gains this year, according to an in-depth forecast by economic researchers Moody’s Analytics,” USA Today reported on Friday. “Moody’s predicts the biggest beneficiaries of the payroll gains will be the leisure and hospitality industry as consumers open their wallets wider; professional and business services, a broad category that includes lawyers, accountants and temporary workers; and eventually, construction, as housing supplies dwindle….It forecasts that Florida’s healthy tourism industry and recovering construction industry will help power a 3.2% increase in payrolls in the Sunshine State by fall,” compared with the third quarter of 2010 and a nationwide gain of 1.9%. An accompanying box notes, “More people are moving here again, which will force homebuilders to hire, boosting construction jobs. [In California,] slow recoveries in construction and financial services are negating stronger performances in state’s tech industries. [In Nevada,] very high foreclosure numbers will continue to crowd out residential housing construction, keeping the brakes on near-term growth.”
The value of new nonresidential construction starts declined 8% in December from December 2009, Reed Construction Data reported on Tuesday, based on data it collected. Building starts fell 5% and heavy engineering, -11%, For the year, starts fell 1.5%. Building construction fell 3.2% in 2010, with commercial, -7.8%; manufacturing, -13%; and institutional, -0.3%. Heavy engineering construction rose 1.1%, with road/highway up 3.8% and water/sewage up 5.3%.
“Reports from the 12 Federal Reserve Districts suggest that economic activity continued to expand moderately from November through December,” the Fed said today in the Beige Book, an informal summary of conditions in each district, which is referred to by its headquarters city. “Conditions were generally said to be better in Districts’ manufacturing, retail, and nonfinancial services sectors than in financial services or real estate….However, the Boston, Atlanta, and Dallas Districts noted that business remained weak for manufacturers selling into the construction sector.… Activity in residential real estate and new home construction remained slow across all Districts….The St. Louis District saw additional declines in existing home sales, but also cited increased new home construction permits….High levels of existing home inventories continued to damp the pace of new home construction in most Districts reporting on construction, although Boston, Richmond, Dallas, and San Francisco mentioned pick-ups in multifamily construction within their Districts…. Commercial construction activity was described as very limited across most Districts, with the bulk of new activity coming from projects related to healthcare, public infrastructure, and multifamily housing….the outlook for construction was mixed and some Districts noted rising costs as a concern.”
Although Reed reported a 3.1% drop in retail construction in 2010, recent reports show slight improvement in vacancy and lease rates, plus expansion plans for some chains."