HVAC Breaking News

Feb. 5, 2008: Nonresidential Construction Shows Vigor Despite Housing Slump

February 5, 2008
/ Print / Reprints /
ShareMore
/ Text Size+

WASHINGTON - “Nonresidential construction employment eked out a small gain in January, implying that the spending rise of 2007 will continue,” said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). Simonson was commenting on two new economic releases - January payroll employment from the Bureau of Labor Statistics (BLS) and December construction spending from the Census Bureau. “A 3.5 percent jump in employment of architects and engineers since January 2007 also suggests that nonresidential activity will remain positive.

“Total construction employment fell by 27,000 in January, seasonally adjusted, but all of those losses occurred in residential building and specialty trades,” Simonson observed. “Employment in the three nonresidential categories - nonresidential building, specialty trades, plus heavy and civil engineering - edged up 1,300.

“The reality is a good deal better for nonresidential construction employment than BLS indicates,” Simonson asserted. “Census figures for December show nonresidential construction spending jumped almost 16 percent from a year earlier, which could only have occurred with a sharp rise in employment. The ‘missing’ employees work for specialty trade contractors - firms that entered the database as residential but are now busy installing wallboard, wiring, and plumbing in schools, hotels, and offices rather than houses.

“Residential spending in December fell 20 percent from a year before,” Simonson noted. “That suggests residential employment probably fell by roughly 20 percent as well, or 660,000 jobs, not the 240,000 that BLS counted. If these 420,000 ‘residential’ specialty trade contractors were included in the nonresidential workforce, nonresidential construction employment for the past year would show a hefty gain of about 8 percent. That would be consistent with the rise in nonresidential spending that Census reported.

“The Census numbers show growth, mostly at double-digit rates, in 15 of 16 nonresidential categories - everything except religious structures, which are closely linked to new housing,” Simonson stated. “For 2008, I expect continued expansion in power, energy, communication, hospital, and higher education construction, and a modest increase in the nonresidential total, before taking cost escalation into account. Unfortunately, materials costs are accelerating again, particularly diesel fuel and steel.

“States have identified billions of dollars of infrastructure projects that are ready to go if the federal government will supply more funding,” Simonson concluded. “If Congress is intent on passing a stimulus bill, it should include infrastructure money to keep construction workers on the job and offset some of states’ lost purchasing power.”

Publication date: 02/04/2008

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

2014 MCAA Annual Convention

Scenes from the 2014 MCAA Annual Convention in Scottsdale, Ariz.

Podcasts

NEWSmakers: Julian Scadden

Training is an ongoing process. Julian will discuss how you can generate maximum return on time and energy invested training by following a three part process. Listen to this podcast to get expert tips on training, tracking and follow up. 

More Podcasts

THE MAGAZINE

ACHRNEWS

NEWS 04-14-14 cover

2014 April 14

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

SERVICE CALLS POLL

Which statement on service calls best applies to your business?
View Results Poll Archive

HVACR INDUSTRY STORE

plumbing-hvac.gif
2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

 

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

DON'T MISS A THING

Magazine image
 
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

STAY CONNECTED

facebook icontwitter iconyoutube iconLinkedIn i con