Construction jobs wither in most metros; McGraw-Hill starts, AIA Billings Index sag

Construction employment declined in 333 metropolitan areas in June compared to June 2008, rose in 10 and was unchanged in nine, according to an AGC compilation, released today, of data from the Bureau of Labor Statistics. (Data for most metros combines logging and mining with construction.) The only metro areas with job gains greater than 100 were Columbus, Indiana, 600 jobs or 32% (combined); Weirton, West Virginia-Steubenville, Ohio, 500 or 17% (combined); Baton Rouge, 2,100 or 5% (construction only); Tulsa, 400 or 2% (construction only); and Odessa, Texas, 200 or 2% (combined). The largest percentage losses were in Pascagoula, Mississippi, -2,400 or -36% (combined); Reno-Sparks, Nevada, -5,800 or -33% (construction only); Duluth, Minnesota-Superior, Wisconsin, -2,800 or -31% (combined); and Redding, California, -1,300 or -31% (combined). Losses totaled 10% or more in 206 of the 352 areas, including divisions of large metros. New construction starts in June dropped 7%, seasonally adjusted, McGraw-Hill Construction reported on July 21, relying on data it compiled. Nonresidential building in June slipped 4%, with decreases in commercial construction: warehouses, -4%; office buildings, -7%; stores, -12%; and hotels, - 25%. "The public buildings category, which had been lifted in May by the start of two large courthouse projects and two large detention facilities, fell 47% in June. Reduced contracting was also reported in June for churches, down 14%; and transportation terminals," -38%. Gainers included: educational buildings, 17%; amusement and recreational, 75% "after a weak May;" healthcare facilities, 4%; and manufacturing, 55% "with the support coming from the start of a $676 million semiconductor plant in upstate New York. Nonbuilding construction...dropped 20% in June. The prior month had included $2.5 billion related to segments of the Keystone oil pipeline in the Midwest; if this project is excluded from the May statistics nonbuilding construction in June would be up 1%. Highway construction in June advanced 13%, rising for the fourth straight month....sewer construction grew 14% in June, river/harbor development held steady, and water supply projects dropped 20%. The electric utility category in June rose 15%, helped by the start of a $619 million power plant in Virginia. Residential building in June advanced 8%....Single-family housing climbed 9% [but] was still 20% below the monthly average for 2008....Multifamily housing in June was unchanged from May [but] was 63% below the monthly average for 2008." The American Institute of Architects (AIA) reported on Wednesday that its Architecture Billings Index, which measures the difference between the number of architecture firms with rising or falling billings in the prior month, dropped in June to its lowest point since February. Subindexes fell for all four practice types-residential (mainly multifamily), commercial/industrial, mixed and institutional, with the last hitting the lowest point in its 13-1/2 year history. The House Transportation and Infrastructure Committee reported on Monday, "Of the $64.1 billion provided in the Recovery Act for programs under the Committee's jurisdiction, 9,356 projects totaling $30.5 billion have been announced," according to reports the committee received as of June 30 from state, local and territorial government agencies. Some "5,079 highway and transit projects have been put out to bid in all 50 states, four territories, and the District of Columbia, totaling $16.7 billion....work has begun on 2,522 projects...totaling $7.7 billion, an increase of 75% in the 30 days since the previous reporting deadline." Hotel construction starts in the second quarter (Q2) "were at a cyclical low of 190 projects/19,820 rooms," Lodging Econometrics reported on Monday. "Only a relatively small number of projects have migrated up the Pipeline toward construction, while many others remain stalled. As these trends continue, LE expects more developers with stalled projects to cancel or to postpone until lending and operating trends improve. In Q2, Cancellations and Postponements reached a record high of 507 projects/76,726 rooms, making this the second consecutive quarter with cancellations at 500 or more projects. While Cancellations and Postponements always take place on a one by one basis, a new trend has recently emerged. Some developers have put their entire development portfolio on hold until another point in time as they move to preserve their capacity to deal with other issues in their operating portfolio. Finally, New Project Announcements (NPAs) into the Pipeline, directly impacted by the precipitous operating declines, are at their lowest level in 18 quarters. At 356 projects/40,682 rooms, NPAs are down 68% by rooms from Q1 2008's cyclical peak. This trend will continue in a low channel until early next decade." The California legislature approved a package of 30 bills on Friday designed to close a $26 billion budget gap. The package included taking $1.7 billion in redevelopment funds from local governments. "Los Angeles city officials said they expect to lose about 2,300 construction jobs because of a proposal in the budget agreement to take $72 million of its funds for redevelopment projects," the Wall Street Journal reported on Wednesday. "Redevelopment funds will be taken from many other cities across California under the budget deal. But a "proposal to siphon off gas tax money totaling a billion dollars in each of the current and next year fiscal years was taken off the table in the Assembly.," KABC-TV reported. "It's the money local governments use for pothole repair and other transportation needs."