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Mon, Sep 22, 2014

Construction on slow, but steady rise

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Construction on slow, but steady rise | Real Estate, Construction, Finance, Economy, Rutherford County, Murfreesboro, Business, Tennessee, Murfreesboro, Smyrna, Unemployment

This commercial building is being built near the intersection of Rutherford and Northfield boulevards in Murfreesboro. (Photo by D. Gardonia)
New national data shows the construction industry is maintaining its upward, but sluggish, trend toward improvement.

Construction spending in February topped year-ago totals by 5.8 percent, a new analysis of federal data released by the Associated General Contractors of America shows. According to the report, a double-digit increase in private construction offset a small drop in public sector spending.

National gains occurred despite a 1.1 percent decrease in spending from January to February and a dip of 0.8 percent the month before, based on revised data.

“It is heartening to see that nearly all private residential and nonresidential segments exceeded their February 2011 levels this February and that the decline in public construction has moderated from the steep pace of early last year,” Ken Simonson, the association’s chief economist, said. “The improvement is too widespread to be attributed just to favorable weather comparisons.”

He pointed out private nonresidential spending had an especially strong year-over-year gain, rising 14 percent from February 2011 to February 2012.

New single-family construction posted a 4.2 percent year-over-year rise although it slipped 1.5 percent for the month, possibly because mild December and January weather “pulled forward” construction that normally begins in February. New multifamily construction was up 26 percent from the previous February and 2.0 percent from January. Spending on residential improvements moved up 4.5 percent year-over-year and 1.2 percent for the month.

Simonson noted that public construction spending declined 1.4 percent in February from a year earlier and 1.7 percent from January. The two largest public categories showed similar results. Highway and street construction, the largest public category, edged up 0.4 percent year-over-year but fell 2.6 percent for the month. Educational spending rose 0.8 percent over 12 months but dropped 2.5 percent from January to February.

Construction employment lost 7,000 jobs between February and March, but extended a pattern of modest year-over-year job increases, shows an analysis of federal employment data released Friday by the Associated General Contractors of America.

“Both the small monthly change and the March-to-March gain of 55,000 jobs, or 1 percent, are consistent with the uneven, tentative recovery that contractors have been reporting nationwide,” noted Ken Simonson, the association’s chief economist.

March was the seventh consecutive month that construction employment had risen from the same month a year earlier, he added.

“Meanwhile, the industry’s unemployment rate has been dropping faster than the pickup in construction jobs, implying that workers are leaving the industry, which could cause problems later.”

The construction unemployment rate in March was 17.2 percent, or roughly double the national unemployment rate. That said, the industry rate had improved from 20 percent in March 2011 and 24.9 percent in March 2010.

“In the past two years, the industry’s unemployment ranks have dropped by more than 800,000,” Simonson said. “That is good news for those who have found jobs, but unfortunately construction firms have not hired most of them. Construction employed the same number of workers – 5.55 million – in March 2012 as it did in March 2010. That means construction workers are leaving the industry, either for other jobs or to retire, and contractors may have trouble finding experienced workers in the future.”

Officials said the pickup in construction jobs is likely to remain anemic and unbalanced unless there is adequate funding for long-term infrastructure. They cited the continuing lack of action on a multilayer federal highway and transit bill as a particular problem.

“Just when contractors should be adding workers and getting an early start on the spring construction season, Congress has again left town leaving highway funding on another short-term extension,” Stephen E. Sandherr, CEO of Associated General Contractors of America, said. “When lawmakers return this month, they should follow through on a bill with enough funding to enable contractors and state agencies to make longer-run plans.”
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Business, Construction, Economy, Finance, Murfreesboro, Real Estate, Rutherford County, Smyrna, Tennessee, Unemployment
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