U.S. construction employment hit a bump in the road in March, dropping, albeit slightly, for the first time in the past 14 months.
Construction jobs fell by 1,000 in March but they're still up by 282,000 compared to March 2013, and the sector's unemployment rate fell to 9.5 percent, according to an analysis released April 3 by the Associated General Contractors of America. Association officials noted that declining demand for residential and public sector projects offset gains in other areas to contribute to the overall month job losses.
"After 14 months of steady job gains, construction employment suffered in March," said Ken Simonson, the AGC's chief economist. "Except for multifamily construction, home building remains weak and government officials just can't seem to find a way to pay for needed repairs to a host of aging facilities."
Numbers on U.S. construction spending, which lag compared to employment figures, show the industry dropped a bit in February from the prior month. The $967 billion in February spending fell only 0.1 percent from January, the AGC reported on April 1, but the figure was 2.1 percent higher than in February 2014.
"Because severe weather in winter months can distort month-to-month comparisons, looking at the first two months of 2015 combined, compared with the same span of 2014, provides a more realistic picture of construction activity," Simonson added. "Among private construction segments, both new multifamily construction and manufacturing construction jumped 30 percent between the first two months of 2014 and 2015. These sectors should remain hot all year."
Meanwhile, the Dodge Momentum Index for the U.S. construction industry saw the numbers, and the index responded by dipping slightly in March, falling 2.1 percent compared to February. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. Despite the March decline, the Momentum Index has trended higher over the last 12 months. For the first three months of this year, the Momentum Index has averaged a 12 percent gain compared to the first three months of 2014. "This rising trend in the Momentum Index points to increased construction starts through at least early 2016," Dodge said.