Jobs expand in 35 states through September; reports vary as to hurricane impacts

Seasonally adjusted construction employment rose in 35 states and the District of Columbia from September 2016 to September 2017, fell in 14 states and was unchanged in Idaho, an AGC analysis and map of BLS data released on Friday showed. The largest percentage gains occurred in Oregon (15%, 13,500), followed by Rhode Island (14%, 2,500 jobs), Nevada (13%, 9,700) and Louisiana (11%, 14,700). California again added the most jobs (44,600, 5.7%), followed by Louisiana, Texas (14,300, 2.0%), Oregon and Florida (12,700, 2.6%). The steepest percentage and number of jobs lost were in Iowa (-8.1%, -6,600 jobs) and Missouri (-5.2%, -6,400). There were also large numbers of jobs lost in Georgia (-6,200, -3.4%) and Illinois (-5,800, -2.7%). For the month, employment rose in 26 states, fell in 22 states and was flat in Indiana, Tennessee and D.C. Texas added the most jobs for the month (4,100, 1.7%), while the largest losses occurred in Florida (-21,000, -4.1%) and Georgia (3,600, -2.0%). These numbers probably reflect the beginning of Texas's recovery from Hurricane Harvey, which struck in August, and Irma, which hit Florida and part of Georgia during the reporting period for September. On October 16, BLS posted a revised fact sheet on the effects of recent hurricanes on its data collection and reporting. (AGC's rankings are based on seasonally adjusted data, which in D.C., Tennessee and five other states is available only for construction, mining and logging combined.)

            The extent and timing of reconstruction remain uncertain for the coastal areas of Texas hit by Hurricane Harvey. In reply to an inquiry from AGC of America, the Houston chapter executive replied on Friday, "I have not heard of any major cancellations or reconstructions. In a meeting last week, there seemed to be a suggestion that there is a collective breath being taken after Harvey, and things will eventually continue to move forward." The executive of AGC of Southeast Texas, based in Beaumont, replied today, "Many of the current projects have been suspended indefinitely, as reconstruction and rebuilding is the focus here, including industrial. As the renovations are completed, we expect to see work on current projects resume. Very few new projects are in the pipeline." The executive of the South Texas chapter, based in Corpus Christi, replied today, "Current projects had a slight delay due to the storm but have since continued on. Harvey has added additional restorative projects to current ones but [we] have not had any major delayed or suspended projects."

            "Reports from all 12 Federal Reserve districts indicated that economic activity increased in September through early October, with the pace of growth split between modest and moderate," the Fed reported on Wednesday in the latest "Beige Book." The Beige Book is a compilation of informal soundings of business conditions in each of the districts, which are referenced by the name of their headquarters cities. AGC posted a compilation of construction-related comments, which were more numerous than usual among the district reports. The summary included these comments: "Residential construction continued to increase, and growth in commercial construction was up slightly on balance....Many districts noted that employers were having difficulty finding qualified workers, particularly in construction, transportation, skilled manufacturing, and some health care and service positions....Firms in several districts reported that scarcity of labor, particularly related to construction, would be exacerbated by hurricane recovery efforts. Despite widespread labor tightness, the majority of districts reported only modest to moderate wage pressures. However, some districts reported stronger wage pressures in certain sectors, including transportation and construction. Growing use of sign-on bonuses, overtime, and other nonwage efforts to attract and retain workers were also reported....Transportation, energy, and construction materials prices increased more rapidly, with some districts citing effects from hurricanes."

            The value of new construction starts "soared" 14% from August to September at a seasonally adjusted annual rate, Dodge Data & Analytics reported on Thursday. "The nonresidential building sector strengthened for the second month in a row, climbing 37% with the boost coming from the start of a $6.0 billion ethane cracker plant in western Pennsylvania plus two projects in New York [City]—the $4.0 billion Delta Airlines new terminal facility at LaGuardia Airport and the $1.7 billion 50 Hudson Yards office tower in Manhattan. Residential building in September edged up 1%, as both single-family and multifamily housing registered modest gains [1% and 2%, respectively]. Running counter in September was a 3% drop for nonbuilding construction, with decreased activity for its public works segment. Through the first nine months of 2017, total construction starts on an unadjusted basis...essentially match[ed] the corresponding amount from a year ago. [Chief Economist Robert Murray stated,] 'Looking at the data on quarterly basis helps to ease the volatility present in the monthly statistics, and it shows the third quarter rebounding 8% after a 9% decline in the second quarter, returning the level of activity to within 2% of the strong pace achieved during the first three months of this year. As the current expansion for construction has matured, there's been more of an up-and-down pattern on a quarterly basis, including what's been reported so far during 2017. What does stand out about the construction industry in 2017 is the strength shown by nonresidential building, led by such institutional project types as transportation terminals and educational facilities. On the commercial side, office buildings and warehouses continue to see growth, although hotel construction appears to have peaked and store construction has generally weakened. And, with this year's pickup in petrochemical plant starts, following a steep two-year decline, the manufacturing building category is no longer exerting a downward pull on the nonresidential building total.'"

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