Ken Simonson's blog

Editor’s note: AGC Houston held their 2014 Annual Chapter Meeting last week where attendees heard about the chapter’s 2013 successes and accomplishments and also received economic and construction industry updates from featured speakers. Ken Simonson, Chief Economist for the Associated General Contractors of America, offered the following update about the improving economy and what that means for construction companies in 2014.

Last week, AGC of America put out our annual survey that over 800 companies participated in, and for the first time in the five years that we've done this survey, there was much more optimism about the current year than there was pessimism. We asked first to say when they thought the market would turn positive, and a plurality, 37%, said 2014. Over two-thirds of the firms said it would be this year or next year, and previously a majority had always said that things weren't going to turn up for at least two years. Now here in Houston, the good times have already been rolling, and the breakout on Texas contractors definitely shows more optimism about the current year and about most business segments than the national survey.   [node:read-more:link]

AGC members, MHC, Reed economists foresee upturn in 2014; union share of jobs rises

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Contractors are more upbeat about the near-term outlook for construction – especially private construction – than they have been since the recession ended in 2009, according to an annual survey AGC released last Tuesday.  More than 800 members from every state and the District of Columbia answered the online questionnaire in December or early January.  In contrast to prior years, when most respondents thought the construction market would not begin to grow for two years or more, a plurality of this year’s respondents – 37% – picked 2014 as the year the market would grow.   [node:read-more:link]

Prices remain tame; federal funding rises a bit; Beige Book shows optimism

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Click to view the December Producer Price Indexes (PPI) table.

The producer price index (PPI) for finished goods inched up 0.1%, not seasonally adjusted (0.4%, seasonally adjusted), in December and 1.2% over 12 months, the Bureau of Labor Statistics reported on Wednesday. The PPI for inputs to construction – an average of the cost of all materials used in construction plus items consumed by contractors, such as diesel fuel – also rose 0.1% for the month and climbed 1.3% year-over-year. That was the smallest yearly increase since 2009, slightly less than the 1.4% rise in 2012.   [node:read-more:link]

Construction employment slips in December; Dodge, Reis reports point to growth ahead

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Nonfarm payroll employment increased by 74,000, seasonally adjusted, in December and 2,293,000 (1.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. Construction employment fell for the first time since May, by 16,000, to 5,833,000, an increase of 122,000 (2.1%) over the past year. Total hours worked (aggregate weekly hours) in construction fell for the month and increased only 0.8% from December 2012, implying that contractors are no longer extending hours per worker, as they had earlier in the year. Residential construction employment (residential building and specialty trade contractors) climbed by 6,200 for the month and 99,800 (4.8%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) decreased by 22,900 from November and rose by 22,100 (0.6%), respectively.   [node:read-more:link]

Construction spending rises in November; most metros add jobs

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Construction spending in November totaled $934 billion at a seasonally adjusted annual rate, up 1.0% from the October total (which was revised up by $16 billion) and up 5.9% from November 2012, the Census Bureau reported on Thursday. The number was the highest since March 2009. Private nonresidential spending jumped 2.7% from October but only 1.0% from November 2012. Private residential spending rose 1.9% for the month and 17% year-over-year. Public construction spending slumped 1.8% from October and 0.2% compared with November 2012. Of the three residential components, new single-family construction rose 1.8% for the month and 18% year-over-year. New multifamily construction soared 0.9% and 36%, respectively.   [node:read-more:link]

Most states add jobs in November; BLS projects steep gains but no new peak by 2022

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

In November, seasonally adjusted nonfarm payroll employment increased from a year earlier in 49 states and the District of Columbia and decreased in Alaska, the Bureau of Labor Statistics (BLS) reported Friday. Seasonally adjusted construction employment climbed in 39 states (the same year-over-year total as in October), declined in 10 states and D.C., and held steady in Delaware, an AGC analysis showed. Mississippi again had the steepest year-over-year percentage increase (17%, 8,000 jobs), followed by Connecticut (11%, 5,600 jobs), Missouri (9.8%, 10,100 jobs) and Georgia (9.5%, 13,200 jobs). California added the most construction jobs for the year (31,500, 5.2%), followed by Florida (24,300, 7.0%), Texas (13,300, 2.2%), Georgia and Missouri.   [node:read-more:link]

Materials costs fall; job openings rise but hiring dips; age cohort shifts pose challenges

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

View the November PPI table here.

The producer price index (PPI) for finished goods fell 0.5%, not seasonally adjusted (-0.1%, seasonally adjusted), in November and edged up just 0.7% over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. The PPI for inputs to construction – a weighted average of the cost of all materials used in construction plus items consumed by contractors such as diesel fuel—also dropped 0.5% for the month and rose 1.1% year-over-year. The PPIs for inputs to different types of construction all declined for the month and increased only slightly year-over-year:   [node:read-more:link]

Construction employment rises again; Fed, IHS surveys find worker-shortage worries

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

Nonfarm payroll employment increased by 203,000, seasonally adjusted, in November and 2,293,000 (1.7%) over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. Construction employment rose for the sixth straight month, to a 51-month high of 5,851,000, up 17,000 from October and up 178,000 (3.1%) over the past year. Total hours worked (aggregate weekly hours) in construction since November 2012 increased by slightly more (3.4% ), implying that contractors are no longer extending hours per worker as much as they had earlier in the year.   [node:read-more:link]

Construction spending, number of metros with job gains rise in October
 
Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

View October metro employment figures by state and rank here.

Construction spending in October totaled $909 billion at a seasonally adjusted annual rate, up 0.8% from the September total and up 5.3% from October 2012, the Census Bureau reported on Tuesday. The number was the highest since May 2009, but only because initially higher estimates for August and July were revised down by $11 billion and $7 billion, respectively. The gain since September was attributable to a 3.9% rise in public construction spending, which also climbed 2.3% compared with October 2012. Nevertheless, the year-to-date total for public construction was 2.8% below the total for the first 10 months of 2012 combined. Private residential spending slipped 0.6% for the month, but rose 18% year-over-year and 17% year-to-date. Private nonresidential spending decreased 0.5% from September and 3.4% from October 2012, but was up 0.8% year-to-date.   [node:read-more:link]

Job gains spread to 39 states; material, labor costs remain mild; starts rise, MHC says

Editor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.

In October, seasonally adjusted nonfarm payroll employment increased from a year earlier in 49 states and decreased in Alaska and the District of Columbia, the Bureau of Labor Statistics (BLS) reported Friday. Seasonally adjusted construction employment climbed in 39 states—the largest total in 18 months—and declined in 11 states and D.C., an AGC analysis showed.   [node:read-more:link]