The current and future economy, trends in design and construction, political influence – sometimes we have something to say about topics which may be signs of things to come.

Construction employment grows in October; spending slips in September

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 in October increased by 161,000, seasonally adjusted, from September and by 2,357,000 (1.7%) year-over-year (y/y), the Bureau of Labor Statistics (BLS) reported today. The unemployment rate (4.9%) inched down from 5.0% in September. Construction employment (6,679,000) increased by 11,000 from September and by 195,000 (3.0%) over 12 months to the highest level since December 2008. Residential construction employment (residential building and specialty trade contractors) rose by 4,500 for the month and 139,700 (5.6%) y/y.    Read more » about AGC's Data DIGest: Oct. 31-Nov. 4, 2016

The following article originally appeared in the November newsletter to clients of Kiley Advisors, LLC for the purpose of providing the latest leading indicators and industry issues to those clients.  Reprinted with permission.

The worst is likely behind us.  At least that was the sentiment around a panel of economists discussing Houston’s economy.  While the recovery will be slower and longer than previous recessions, barring an unforeseen event, it appears that Houston is beginning to recover.

The focus of the panel, instead, was on how far Houston fell before the change in direction.  An early re-benchmark of the employment numbers by the Federal Reserve Bank of Dallas shows employment numbers from the Texas Workforce Commission will likely be revised down, though how far is anyone’s guess.   Read more » about Houston’s Monthly Metrics: November 2016

Leaders in the commercial construction industry in Houston have a lot to be thankful for despite a state and global economy that is struggling in many ways. Houston – along with the rest of Texas – has been hit hard by the downturn in energy but the economy here is much more diversified than it was during previous oil busts. Improvements in sectors like health care and real estate have helped to blunt some of the economic damage incurred by oil and gas as well as manufacturing.

During a conference presented by Kiley Advisors this past week, consultants Pat Kiley and Candace Hernandez told construction executives that while the rate of global economic growth is slowing, there are bright spots that will keep builders here quite busy.

Texas has added 1.8 million people since 2010 and a little more than 14% of the state’s economy is now energy specific or energy-related. Job growth has slowed overall, with about 167,000 jobs added in 2015 after more than 361,000 were added in the previous year. GDP growth for 2016 is expected to be 1.6 percent, down from about 3 percent in 2015.

Unfortunately, “Houston continues to be the weak sister,” Hernandez said of the unemployment numbers in metropolitan areas around Texas. Unemployment in the Bayou City is 5.7 percent, compared with 4.1 percent in DFW and San Antonio, and 3.5 percent in Austin.    Read more » about Economic Outlook: A Mixture of Clouds and Sunshine

Construction pay appears to dip; other costs are mixed; injury rate declines again

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.

Compensation costs (wages, salaries and benefits, including required employer payments such as unemployment and workers compensation) in private industry in the third quarter of 2016 (Q3) increased 0.5%, seasonally adjusted (after rising 0.5% in Q2), and 2.3% over 12 months, the Bureau of Labor Statistics (BLS) reported today. Wages and salaries also rose 0.5% in Q3 (vs. 0.6% in Q2) and 2.4% over 12 months.    Read more » about AGC's Data DIGest: October 25-28, 2016

35 states add jobs in September; Dodge predicts starts will rise in 2017; ABI slips again

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.

Seasonally adjusted construction employment rose in 35 states from August 2015 to August 2016 and fell in 15 states and the District of Columbia, an AGC analysis of Bureau of Labor Statistics (BLS) data released on Friday showed. Iowa again led in percentage gain (18%, 13,700 jobs), followed by Colorado (13%, 19,400), Hawaii (11%, 3,900) and Idaho (11%, 4,200). The most jobs added were again in California (30,900 jobs, 4.2%), Florida (22,800, 5.2%) and Colorado. Wyoming had the steepest percentage loss (-9.2%, -2,100), followed by Kansas (-7.7%, -4,700), Montana (-6.9%, -1,800) and North Dakota (-6.3%, -2,100). Kansas lost the most jobs, followed by Alabama (-3,500, -4.3%) and Pennsylvania (-2,600, -1.1%). For the month, employment rose in 21 states and D.C., shrank in 24 states and was unchanged in five. (AGC's rankings are based on seasonally adjusted data, which in D.C., Hawaii and five other states is available only for construction, mining and logging combined.)

Dodge Data & Analytics released its 2017 construction outlook on Thursday, forecasting that "total U.S. construction starts for 2017 will advance 5%..., following gains of 11% in 2015 and an estimated 1% in 2016.    Read more » about AGC's Data DIGest: October 20-24, 2016

PPIs edge mostly higher; starts reports are mixed; union pay agreements trend up

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.

The PPI for final demand in September, not seasonally adjusted, increased 0.2% from August and 0.7% year-over-year (y/y) from September 2015, the Bureau of Labor Statistics (BLS) reported on Friday. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, edged up 0.1% for the month and 0.8% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—rose 0.7% y/y. Changes ranged from 0.1% y/y for industrial building construction to 0.4% for schools, 0.5% for healthcare buildings, 1.1% for warehouses and 1.2% for office buildings.    Read more » about AGC's Data DIGest: October 8-19, 2016

Yesterday the Greater Houston Partnership hosted a reception in their newly-built convening space located in the heart of downtown to allow media including myself an opportunity to view their gorgeous venue designed to show visiting CEO’s and government dignitaries exactly how wonderful and diverse the Houston region is for both business and living.

Partnership Tower is a ten-story building consisting of parking below and office space above, and featuring a 13,000 square foot configurable space which opens up to a 2,030 square foot terrace overlooking the George R. Brown Convention Center, Discovery Green, and the Marriott Marquies hotel.  Views from the floor-to-ceiling walls inside offer impressive views of the downtown skyline as well as Minute Maid Park, home to the Houston Astros, next door.  Also nearby is BBVA Compass Stadium and easy access to the light rail system.  While it is difficult to look away from the stunning view of the city outside, the interior wall of the hall featured a photo wall consisting of local scenes representing industry and leisure and showing the many faces of the region, all taken by Houston-based photographers.   Read more » about Partnership Tower Offers Stunning New View of Houston

The following article originally appeared in the October newsletter to clients of Kiley Advisors, LLC for the purpose of providing the latest leading indicators and industry issues to those clients.  Reprinted with permission.

Did Houston already go into a recession? Jesse Thompson, Business Economist at the Federal Reserve Bank of Dallas - Houston Branch, noted the Houston Business Cycle Index shows that Houston entered a recession late 2015/early 2016. He provided a chart (right) showing the correlation between rig count and Houston’s core oil and gas related employment noting “further revisions will like confirm what we’ve already observed: that Houston’s economy is contracting, and that Houston may or may not be out of it yet.”

However, fueling the recovery discussion is the renewed optimism in the Purchasing Managers Index’s oil and gas respondents, who for the first time in several months, seemed happier and more upbeat. The PMI itself increased to 46.1 in August – still in an overall contraction phase, but production, sales and new orders were all noticeably up, a leading indicator.   Read more » about Houston’s Monthly Metrics: October 2016

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