February construction job increase in 35 states, D.C.; scaled-back tariffs begin, more likely

Seasonally adjusted construction employment rose in 35 states and the District of Columbia year-over-year (y/y) from February 2017 to February 2018, declined in 14 states and was unchanged in Vermont, an AGC analysis of Bureau of Labor Statistics (BLS) data released today showed. The largest percentage gains again were in West Virginia (14%, 4,300 jobs), followed by Nevada (10.9%, 8,900), California (9.5%, 74,000), Idaho (9.3%, 4,100), Arizona (9.2%, 13,000) and New Mexico (9.0%, 4,000). The most jobs again were added in California, followed by Texas (33,900, 4.8%) and Florida (31,700, 6.3%). The steepest percentage losses again occurred in North Dakota (-16.3%, -4,800) and Iowa (-8.5%, -6,700 jobs), followed by Kansas (-5.3%, -3,00). Iowa lost the most construction jobs, followed by North Dakota, Missouri (-4,000, -3.2%) and Kansas. For the month, employment rose in 38 states, fell in 11, and was flat in Alabama and D.C. New York added the most jobs for the month (7,700, 2.0%), followed by Florida (7,100, 1.4%) and California (6,800, 0.8%). Connecticut had the largest percentage gain for the month (2.6%, 1,500 jobs), followed by Mississippi (2.0%, 900), Indiana (2.0%, 2,800) and New York. Washington lost the most jobs for the month (-1,500, -0.7%), followed by Alaska (-800, -5.0%) and Kansas (-700, -1.2%). Alaska had the largest percentage loss for the month, followed by Montana (-2.1%, -600) and Kansas. Abnormal winter weather may have affected monthly or y/y comparisons, particularly for northern states. (AGC's rankings are based on seasonally adjusted data, which in D.C. and six states is available only for construction, mining and logging combined.)

The tariff situation continues to evolve rapidly. On Thursday, President Trump announced plans to impose tariffs on $60 billion of Chinese goods, with a list of targeted items to be announced by April 6. Tariffs of 25% on steel and 10% on aluminum that the President announced on March 8 were to take effect today, with exemptions for now for Canada and Mexico. But on Wednesday, U.S. Trade Representative Robert Lighthizer indicated to the House Ways and Means Committee that Argentina, Australia, Brazil, South Korea, and the 28 member countries of the European Union will also be exempted, at least until May 1. Japan, Russia and China are still subject to these tariffs. In addition, on Monday, the Department of Commerce published its exclusion process procedures for steel and aluminum tariffs. The Department's Bureau of Industry and Security will collect comments on the procedures until May 18, and the Bureau's website provides more information about the steel and aluminum exclusion/objection process, as well as links to downloadable forms. Companies will need to consider both commenting on the rule (so as to address issues with the Department's procedures) and submitting exclusions requests in a prompt fashion. Readers are invited to send information about their experience with prices and delivery times for materials or changes in project designs and timing that relate to the tariffs to simonsonk@agc.org.

The value of new construction starts in February slipped 3% at a seasonally adjusted annual rate, following a 2% drop in January, construction data provider Dodge Data & Analytics reported on Thursday. "The nonbuilding construction sector, comprised of public works and electric utilities/gas plants, fell 23% in February, resulting in the decline for total construction starts for the second month in a row. In contrast, nonresidential building grew 5% in February, continuing the strengthening trend which resumed in December, and residential building improved a slight 1%. During the first two months of 2018, total construction starts on an unadjusted basis were...down 7% from the same period a year ago, which had been lifted by the start of several unusually large projects. On a 12-month moving total basis, total construction starts for the 12 months ending February 2018 were up 2%."

On Monday, construction data provider ConstructConnect reported, "February's volume of construction starts, excluding residential activity,...relative to February 2017 was -35.5%....Year-to-date (YTD) nonresidential starts in 2018 have been -26% vs. January-February of 2017." Heavy engineering (civil) starts tumbled 23% YTD, while nonresidential building starts plunged 28%. The 12-month moving average was down 2.9%.

The Architecture Billings Index slipped to a still-favorable seasonally adjusted score of 52.0 in February from 54.7 in January, the American Institute of Architects reported on Wednesday. The index measures the percentage of surveyed architecture firms that reported higher billings than a month earlier, less the percentage reporting lower billings; any score above 50 indicates an increase in billings. Scores (based on three-month moving averages) for the four practice specialties were mixed: residential (mainly multifamily), 56.6 (up from 56.0 in January and the highest reading since August 2014); institutional, 53.8 (up from 52.2); commercial/industrial, 51.0 (down from 52.2); and mixed practice, 49.7 (up from 49.4).

Housing starts in February slumped 7.0% at a seasonally adjusted annual rate from the January rate, and were 4.0% below the February 2017 rate, the Census Bureau reported on March 16. Single-family starts climbed 2.9% both for the month and y/y. Multifamily starts (in buildings with five or more units) plunged 28% for the month, following a 24% leap in January, and decreased 19% y/y. Building permits, a fairly reliable indicator of near-term starts, declined by 5.7% for the month but rose 6.5% y/y. Single-family permits dipped 0.6% for the month but rose 4.6% y/y. Multifamily permits tumbled 15% for the month but climbed 13% y/y.

Census issued population estimates on Thursday for counties, metros and micropolitan areas as of July 1, 2017. As in 2016, the top metros for population gain were Dallas-Fort Worth-Arlington, Houston-The Woodlands-Sugar Land, Atlanta-Sandy Springs-Roswell and Phoenix-Mesa-Scottsdale. Washington-Arlington-Alexandria moved from 11th to 5th place and Riverside-San Bernardino-Ontario moved from 13th to 7th. The fastest-growing metro areas were St. George, Utah (9th in 2016); Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C. (2nd in 2016); Greeley, Colo. (4th in 2016); Bend-Redmond, Ore. (3rd in 2016) and Coeur d'Alene, Idaho (15th).

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