The Building Tradesman Newspaper

Friday, November 04, 2016

U.S. construction: slow growth, but 'generally healthy market'

By The Building Tradesman

Michigan isn't No. 1 any more among the states in construction jobs creation. Lately, we're closer to No. 41.

In recent years the national building environment has been described as moving in an up-and-down "sawtooth," pattern - and that's continuing to play out this year, too, throughout the 50 states.

Last month we reported that Michigan was No. 1 in construction jobs creation between July and August of this year, gaining the most jobs in the U.S., 2,600, and growing by 1.8 percent, second in the nation.

The glory proved fleeting, and the numbers weren't very impressive in the first place. It was actually a fairly paltry increase in jobs, and the September jobs numbers released Oct. 21 by the Associated General Contractors revealed construction employment increased in only 21 states between September 2015 and September 2016. The Associated General Contractors has been pointing the finger of blame for reduced activity at worker shortages rather than the economy.

"The list of states that are adding construction jobs has been shrinking, yet contractors generally report they are busy now and optimistic about the workload ahead," said Ken Simonson, chief economist for the AGC. "Therefore, the lack of employment increases in many states may reflect the difficulty contractors say they are having in finding qualified workers."

Dodge Data and Analytics reported on Oct. 18 that overall construction spending in the U.S. retreated 2 percent in September from the month before. That's an improvement from July, when construction was down 11 percent from the beginning of the year.

"Increasingly, it appears that 2016 is shaping up as a year when the overall level of construction starts is essentially holding steady,"  said Robert A. Murray, chief economist for Dodge Data & Analytics.  "This is being supported by such economic factors as moderate job growth, generally healthy market fundamentals for commercial real estate, and the funding coming from state and local bond measures that have been passed in recent years.”

Michigan employed 149,900 construction workers in September 2016, which represents a loss of 1,200 jobs (-.08 percent) from the prior month but a gain of 2,700 jobs compared to September 2015. That 1.8 percent gain ranks Michigan No. 29 in job gains over that 12-month period.

Across the U.S., anemic job gains in construction continue to be the rule rather than the exception. The top job gainers from August to September turned in modest gains, including 2.1 percent in Arizona, followed by South Dakota and North Carolina (both +1.7 percent).