"The fifth subcategory of construction employment, heavy and civil engineering construction, slipped by 8,000 jobs since February," noted Simonson. "The residential building and heavy construction figures have been somewhat distorted by ‘front-loading' that occurred in January, when record warm and dry weather allowed hiring for outdoor work such as excavation and concrete-pouring to be accelerated by several months.

"To get beyond this distortion, it is useful to look at June-to-June comparisons, which show overall construction employment has expanded."

In spite of the expansion, construction employment continues to shift. "Sectors such as manufacturing, energy and mining, and hospitals are adding jobs and facilities, activity that generates nonresidential construction jobs. Meanwhile, single-family and condominium construction are slowing, and employment in these sectors will drop faster once the backlog of current projects is finished," he said.

Other areas of construction are also experiencing a shift in demand and supply prices. Spot shortages are beginning to surface, especially in the highway construction market, currently considered to be vulnerable.

"Asphalt prices have risen 48 percent in the past 12 months, with spot shortages reported," warned Simonson. "Ready-mixed concrete and diesel fuel prices also are up sharply, so highway budgets don't cover as much paving as before. At the same time, cutbacks in driving due to high gasoline prices means motorists are buying fewer gallons of gas, which reduces the revenues flowing into state highway trust funds."

Publication date: 07/17/2006