Skip to main content

News Briefs

Date Posted: March 27 2009

Construction trends continue to drop
New U.S. construction starts in February dropped 8% from the previous month to $376.2 billion, it was reported March 16 by McGraw-Hill Construction.

Nonresidential building continued the downward slide that’s been underway over the past year, and public works slipped back once again after rebounding in January. Meanwhile, residential building in February posted a rare gain, showing some improvement after its very weak January performance.

“The extended decline for construction starts has now continued through the first two months of 2009,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. “The housing correction has been joined by mounting weakness for nonresidential building, as well as some loss of momentum for public works. The early 2009 erosion for public works should be reversed later this spring by the boost coming from the federal stimulus bill,
especially for transportation work.

“The near-term prospects for nonresidential building are not as hopeful – the stimulus bill does not provide as much funding for buildings as it does for infrastructure, and it will take more time for funding directed at buildings to have a positive impact at the construction site. In
addition, the deepening recession and tight lending conditions will further depress overall levels of nonresidential building this year.”

Comparing the 12 months before February 2009 with the same period before February 2008, total construction was down 20 percent. Broken down, the numbers reveal that nonresidential building was 14 percent lower, while the residential construction sector was down 41 percent.

Regionally during the 12 months before February 2009,, the Midwest led the nation by experiencing “only” a 9 percent decline in total construction compared to the previous year. The South Atlantic (down 29 percent) and the West (down 28 percent) were the hardest hit.

Construction wage hikes still healthy
Construction union wage and benefit increases are expected to average 4.4 percent in 2009, the same level as 2008.

So says the Construction Labor Research Council, via the Construction Labor Report, in a report issued last month. The wage and benefit rates are based on numbers from multi-year collective bargaining agreements. The downturn in the building economy is not yet reflected in the numbers, the report said.

The CLRC reported that the average wage/benefit rate for all union trade workers in the U.S. was $46.65 an hour in 2009, a 22.9 percent increase from 2004.

Through 2010, the report said, the average increase would continue at the same 4.4 percent, but by then, contracts run their term and the number U.S. construction workers covered drops by about half.