The Building Tradesman Newspaper

Friday, January 24, 2020

U.S. construction is on course

By The Building Tradesman

As 2019 ended, U.S construction employment was up, spending was trending higher and momentum was moving in the right direction, too.

The federal Bureau of Labor Statistics reported on Jan. 10 that U.S. construction employment increased by 20,000 in December and by 151,000 during the course of 2019. That led to BLS numbers for U.S. construction improving a bit, showing a 5 percent jobless rate and 489,000 unemployed workers at the end of 2019, compared to a 5.1 percent rate and 493,000 jobless the previous December. There were 7.551 million construction workers toiling in December, up 20,000 in one month and up from 7.4 million in December 2018.

The year-end spending for U.S. construction wasn't available as we went to press, but it was moving in the right direction in November 2019, up 4.1 percent compared to 12 months prior.

“Contractors are confident that there will be plenty of projects in 2020,” said Associated General Contractors Chief Economist Ken Simonson. He pointed to an AGC-sponsored survey released last fall that revealed three out of four U.S. contractors expect to keep adding workers in 2020. Even more respondents found it difficult to fill positions in 2019, and a majority anticipate it will be as hard or harder to do so in 2020. “Our survey found that for each of 13 project types, more contractors expect an increase in 2020 than a decrease in the dollar value of projects they compete for," he said. 

Meanwhile, the Dodge Momentum Index for U.S. construction finished the year pointing up in December - higher by 1.5 percent compared to November 2019's reading, although over the course of 2019, the index dropped 3.7 percent compared to the 2018 month-to-month average.

"Last year’s slip in the dollar value of projects entering planning suggests that construction spending for nonresidential buildings could see a setback in the year to come," Dodge reported. "However, the Momentum Index did end the year on a high note indicating that a decline in 2020 construction is likely to be modest in nature."

The Momentum Index, issued by Dodge Data and Analytics, is a monthly measure of the first report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

“Construction can play a major role in sustaining economic growth, but only if the industry has an expanding supply of both qualified workers and new entrants to replace retirees,” said Stephen E. Sandherr, the AGC's chief executive officer.