Total construction spending hit an unknown level in August because the Census Bureau was unable to release new data as a result of the federal government shutdown according to the Associated General Contractors of America. Association officials cautioned that the impacts of the shutdown will go beyond data as solicitations for many new construction projects come to a halt.
“It is hard to get a sense of where the industry is heading when basic construction spending data isn't available,” said Ken Simonson, the association's chief economist. “Unfortunately, the lack of federal spending data likely foreshadows a decline in federal construction spending until the government reopens.”
Association officials urged members of Congress to quickly resolve the political impasse that resulted in a federal shutdown starting today. They warned that solicitations for new federal construction projects will be delayed until the federal government reopens. In addition, other federal construction projects may be delayed as many federal supervisors will not be available to answer questions, approve change orders.
“Depending on how long the government is closed, construction workers are likely to miss out on new job opportunities,” said Stephen E. Sandherr, the association’s chief executive officer. “This shutdown poses a real risk of undermining the industry's long-awaited recovery.”
We do know construction employment increased in 194 out of 339 metro areas between August 2012 and August 2013, but only 19 areas topped previous highs for the month. Pascagoula, Miss. and Los Angeles-Long Beach-Glendale, Calif. Top Growth List; Gary, Ind. and Sacramento-Arden-Arcade-Roseville, Calif. Experienced the Largest Declines for the Year.
Construction employment expanded in 194 metro areas, declined in 88 and was stagnant in 57 between August 2012 and August 2013, according to the last analysis of federal employment data released by the Associated General Contractors of America. Association officials added that despite the widespread gains, construction employment reached peak levels for August in only 19 of 339 metro areas.
"It has been a tough decade for much of the construction industry, considering that many areas experienced peak employment levels in the middle of the last decade," said Stephen Sandherr, the association's chief executive officer. "More troubling, it will take a lot more growth before significantly more metro areas get back to peak employment levels in construction."
Los Angeles-Long Beach-Glendale, Calif. added the largest number of construction jobs in the past year (8,900 jobs, 8%); followed by Boston-Cambridge-Quincy, Mass. (8,700 jobs, 16%); Houston-Sugar Land-Baytown (8,200 jobs, 5%) and Atlanta-Sandy Springs-Marietta, Ga. (8,100 jobs, 9%). The largest percentage gains occurred in Pascagoula, Miss. (36%, 1,500 jobs); Eau Claire, Wis. (30%, 1,000 jobs); Fargo, N.D.-Minn. (25%, 2,100 jobs) and Lake Charles, La. (22%, 2,100 jobs).
The largest job losses from August 2012 to August 2013 were in Sacramento-Arden-Arcade-Roseville, Calif. (-4,900 jobs, -12%); followed by Gary, Ind. (-4,100 jobs, -18%); Riverside-San Bernardino-Ontario, Calif. (-3,400 jobs, -5%) and Northern Virginia (-3,300 jobs, -5%). The largest percentage decline for the past year was in Gary, Ind., Rockford, Ill. (-17%, -800 jobs); Modesto, Calif. (-14%, -1,000 jobs); Shreveport-Bossier City, La. (-13%, -1,100 jobs) and South Bend-Mishawaka, Ind.-Mich. (-13%, -600 jobs).
Fargo, N.D.-Minn. experienced the largest percentage increase among the 19 cities that hit a new August construction employment high from the prior 2008 peak (22% higher). Corpus Christi, Texas added the most jobs since reaching its prior August peak in 2012 (3,600 jobs). Phoenix-Mesa-Glendale experienced the largest drop in total construction employment compared to its prior, August 2006, peak (-86,800 jobs) while Lake Havasu City-Kingman, Ariz. experienced the largest percentage decline compared to its August 2005 peak (-74%).
Association officials said construction employment in many areas was getting a boost from growing private sector demand for new residential and energy facilities. They added, however, that declining investments in infrastructure and other public projects was restraining growth, and in some areas, contributing to declining sector employment. "Instead of feast or famine, conditions right now are more akin to moderate snacking or famine depending on the type of work firms perform," said Sandherr.