Construction spending totaled $1.218 trillion at a seasonally adjusted annual rate in August, 0.5% higher than in July, and 2.5% higher year-over-year (y/y) from the August 2016 rate, the Census Bureau reported Monday. Public construction increased 0.7% for the month but declined 5.1% y/y. Of the three largest public segments, highway and street construction fell 6.0% y/y; educational construction declined 2.8%; and transportation (transit, passenger rail, ports and airports) dipped 0.4%. Private nonresidential spending gained 0.5% from July but slipped 2.5% y/y. Of the four largest components, power (electric power plus oil and gas pipelines and field structures) fell 7.4% y/y; commercial (retail, warehouse and farm) added 10%; manufacturing slumped 21% and office inched up 0.2%. Private residential spending in August rose 0.4% for the month and 12% y/y. New multifamily construction ticked up 2.3% y/y; new single-family construction rose 11%; and residential improvements soared 16%. Census posted a fact sheet on the impact of Hurricane Harvey on August data.
The producer price index (PPI) for final demand in August, not seasonally adjusted, increased 0.2% from July and 2.4% y/y from August 2016, the Bureau of Labor Statistics (BLS) reported on September 13. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, rose 0.3% for the month and 3.3% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—climbed 3.4% y/y. Increases ranged from 2.7% y/y for office and health care buildings, 3.9% for schools, 4.1% for warehouses and 4.5% for industrial buildings. PPI increases for new, repair and maintenance work on nonresidential buildings ranged from 2.6% y/y for roofing contractors to 3.3% for plumbing contractors, 3.6% for electrical contractors and 3.7% for concrete contractors. The PPI for inputs to construction—excluding capital investment, labor and imports—comprises a mix of goods (59%) and services (41%). This index increased 3.2% y/y. The PPI for all goods used in construction rose 3.7% y/y, as the sub-index for energy climbed 16%, while the PPI for goods less food and energy rose 2.4%. The index for services increased 2.5%. PPIs for inputs to seven types of new nonresidential structures had increases ranging from 2.9% for educational and vocational structures to 4.7% for power and communications structures. PPIs for inputs to new residential structures rose 3.2% y/y for single-family housing and 2.8% for multifamily. Materials important to construction that had notable one- or 12-month price changes include diesel fuel, 2.4% in August and 30% y/y; copper and brass mill shapes,4.7% and 18%, respectively; aluminum mill shapes, 2.2% and 9.5%; gypsum products, -1.4% and 8.4%; steel mill products, -1.5% and 6.7%; and lumber and plywood, 1.8% and 6.2%.
Seasonally adjusted construction employment rose in 34 states and the District of Columbia from August 2016 to August 2017 and decreased in 16 states, an AGC analysis of BLS data released on September 15 showed. (The data was collected before Hurricanes Harvey and Irma struck the U.S.) The largest percentage gains again occurred in Rhode Island (18%, 3,200 jobs) and Nevada (15%, 11,600), followed by New Hampshire (12%, 3,100), Oregon (12%, 10,600) and Louisiana (11%, 15,300). The most jobs added were again in California (47,400, 6.1%), Florida (35,000, 7.3%), Louisiana and Texas (15,200, 2.2%), followed by Nevada and Oregon. The steepest percentage losses were in Iowa (-7.3%, -5,900 jobs), Nebraska (-2.9%, -1,500) and South Dakota (-2.9%, -700). The largest number of job losses were in Iowa, Illinois (-3,000, -1.4%) and Missouri (-2,100, -1.7%). For the month, employment rose in 30 states, fell in 17 states and D.C., and was flat in Alaska, Utah and Wyoming. (AGC's rankings are based on seasonally adjusted data, which in D.C., Nebraska, South Dakota and four other states is available only for construction, mining and logging combined.)
Construction employment, not seasonally adjusted, rose from August 2016 to August 2017 in 274 (72%) of the 358 metro areas (including divisions of larger metros) for which BLS provides construction employment data, fell in 52 (15%) and was unchanged in 32, according to an AGC release and map on Wednesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gains again occurred in Riverside-San Bernardino-Ontario, Calif. (15,800 construction jobs, 17%) and the Los Angeles-Long Beach-Glendale division (11,000 construction jobs, 8%), followed by Las Vegas-Henderson-Paradise (10,900 construction jobs, 20%). The largest percentage gains occurred in Lewiston, Idaho-Wash. (27%, 400 construction jobs), followed by Lake Charles, La. (23%, 4,800 construction jobs); Las Vegas-Henderson-Paradise; and the Detroit-Dearborn-Livonia division (20%, 4,400 combined jobs). The largest job losses again were in Houston-The Woodlands-Sugar Land (-4,500 construction jobs, -2%), followed by Columbia, S.C. (-3,900 combined jobs, -23%) and the Orange-Rockland-Westchester, N.Y. division (-2,500 combined jobs, -6%). The largest percentage losses were in Columbia, followed by Grand Forks, N.D.-Minn. (-22%, -1,100 combined jobs) and Danville, Ill. (-17%, -100 combined jobs). August employment was a record high for the month in 43 metros (dating back in most areas to August 1990); none set a new August low.