The Building Tradesman Newspaper

Friday, May 04, 2018

Michigan, U.S. enjoy a strong first quarter '18

By The Building Tradesman

Michigan's first quarter 2018 construction industry picked up where a strong 2017 left off.

At the end of March, employment in Michigan's construction industry rose by a very healthy 7.5 percent compared to 12 months prior, following a 6.9 percent rise in February and a 2.8 percent increase in January. Pretty impressive, considering the never-ending winter that the state experienced. 

What's also impressive: Michigan ranked No. 6 among the states in construction employment gains from March 2017 to March 2018 adding 12,100 jobs. Overall in 2018, our state has gained 6,000 construction jobs this year, for total industry employment of 172,500. Michigan is among 38 states that have experienced construction job gains over the 12-month period through the end of March.

Thirty-eight states and the District of Columbia added construction jobs between March 2017 and March 2018. "Construction employment continues to expand in most parts of the country. As private-sector demand remains strong and limited, new public investments in infrastructure are beginning to have an impact," said chief economist Ken Simonson on April 20. "The two greatest risks to future construction job growth are a lack of available, qualified workers and the potential impacts of new tariffs being imposed by and on the United States."

In front of Michigan, the top five hotspot states for construction employment are No. 1 West Virginia, which enjoyed an 11.2 percent increase in jobs from March 2017 to March 2018, followed by Nevada, Idaho, Massachusetts and New Mexico.

Construction employment was slowest in Hawaii, Nebraska, Kansas, Iowa and North Dakota, a state which saw jobs decrease by 14.8 percent over the past year. The Plains states are being hit hard by farm-related losses.

The AGC said the widespread job gains were welcome news but cautioned that new tariffs announced by the Trump administration and counter measures from other trading partners could undermine demand for construction of shipping, logistics and manufacturing facilities. 

"There are better ways to address trade imbalances than by undermining domestic economic growth," said Stephen E. Sandherr, the association's chief executive officer. 

Meanwhile, the American Institute of Architects (AIA) on April 18 reported that architecture firm billings rose for the sixth consecutive month in March, although the pace of growth slowed modestly from February.

Overall, the AIA’s Architecture Billings Index score for March was 51.0 (any score over 50 indicates billings growth), which still reflects a healthy business environment. The score for the Midwest region was 50.7.

The index, produced by the AIA Economics and Market Research Group, is a leading economic indicator that provides an approximately nine to twelve-month glimpse into the future of nonresidential construction spending activity.

“New project activity coming into architecture firms continues to grow at a solid pace," said AIA Chief Economist Kermit Baker. "As a result, project backlogs—in excess of six months at present— are at their highest post-recession level."