New construction starts dropped 9% in November, seasonally adjusted, McGraw-Hill Construction (MHC) reported on December 16, based on data it compiled. "Nonresidential building retreated after October's elevated activity, and nonbuilding construction (public works and electric utilities) also settled back. Meanwhile, residential building in November held steady with its October pace," MHC reported. Through the first eleven months of 2009, total starts fell 28% from the same period a year ago. "November's pullback following the strong gain in October is a continuation of [a recent up-and-down] pattern," Robert Murray, MHC's vice president of economic affairs, said. "Accordingly, even with the November decline, the evidence of recent months suggests that overall construction activity has at least stabilized at a low level. Single family housing is no longer exerting a downward pull, and the federal stimulus act to this point has supported greater construction of highways, bridges, river/harbor development, and courthouses. At the same time, the negatives of weak employment, tight bank lending, and diminished state fiscal health continue to depress most of the nonresidential building structure types as well as multifamily housing."
Several new reports show differences in employment, income and population growth among states. On Friday, the Bureau of Labor Statistics (BLS) reported that seasonally adjusted unemployment rates fell in November in 36 states and the District of Columbia, rose in eight states, and remained unchanged in six. Earlier, BLS had reported the U.S. rate fell to 10% from 10.2% in October. However, nonfarm payroll employment rose for the month in only 19 states and fell in 31 plus D.C. Compared to November 2008, jobless rates increased and employment decreased everywhere. Construction employment rose in 26 states, fell in 23 plus D.C. and was unchanged in Delaware. That was an improvement from the prior month, when construction employment climbed in only 17 states, fell in 32 plus D.C. and was unchanged in New Hampshire. But it is too early to say construction is picking up generally. Only eight states had back-to-back construction job gains in October and November: Kansas, 5%; West Virginia and Indiana, 4% each; Wisconsin 3%; Arkansas, Georgia and Ohio, 2%; and Massachusetts, with minimal gains in both months. North Dakota remained the only state with a 12-month net gain in construction jobs: 900 jobs or 4%. The biggest 12-month percentage losses were in Nevada, -25%; Arizona and Tennessee, -22% each; Kentucky, -21%; Maryland and Wyoming, -18% each.
On Thursday, the Bureau of Economic Analysis reported that state personal income change in the third quarter averaged 0.3%, seasonally adjusted, "with 19 states seeing net earnings growth for the first time in at least a year...Personal income growth rates ranged from 0.8% in Alaska to -0.4% in Louisiana." Although personal earnings in construction shrank nationally in the third quarter, construction earnings were positive in North Dakota, Alaska and New Hampshire and were unchanged in New Jersey.
U.S. population grew 0.86% to 307 million in the year ending July 1, 2009, the Census Bureau reported today. The growth rate was the slowest this decade, as the recession reduced net international migration. Prior-year totals and rankings were revised. Population grew 2.1% in Wyoming (which grew 1.8% in 2008, 8th among 50 states plus D.C.) and Utah (2.4%, 1st in 2008); 2.0% in Texas (2.0%, 4th in 2008); 1.8% in Colorado (1.9%, 5th); and 1.6% in D.C. (0.6%, 35th). Three states shrank: Michigan (-0.3%, following a drop of 0.5% in 2008), Maine (-0.1%; +0.2% in 2008) and Rhode Island (-0.03%; -0.1% in 2008). The latter two states had small population changes. Census noted, "Several states have negative net domestic migration, which means more people are moving out than moving in. Florida and Nevada, which earlier in the decade had net inflows, are now experiencing new outflows." However, neither state lost population, as some earlier reports had suggested: Florida's population climbed 0.6% (32nd; 0.8% in 2008); Nevada, 1.0% (17th, 1.9% in 2008). Locations that showed the greatest increase in growth rate from 2008 to 2009 were D.C., Alaska, North Dakota, Oklahoma and Wyoming. Above-average growths rate and increase in growth rate can indicate opportunities for both residential construction and other categories related to population, such as schools and retail.
On December 11, the Brookings Institution posted a study by demographer William Frey documenting the sharp slowdown in migration among states and metro areas in recent years (www.brookings.edu). "From 2007 to 2008, 23 states, mostly in the Intermountain West and Southeast, showed reduced in-migration or a switch from in- to out-migration. Thirteen states, mostly on the coasts, showed lower levels of out-migration....Migration to exurban and newer suburban counties dropped substantially, while it brought about unexpected "windfall" gains in many large urban cores....It is probably true that the attractiveness of previous real estate-fueled growth magnets will not return to mid-decade levels anytime soon. Yet other metropolitan areas could be major draws. Already, there are signs of relatively strong economic performance in both Sun Belt and Snow Belt areas with diversified, new economy industries, or specializations in 'eds and meds.' These include places like Seattle, Austin, Washington, D.C., Houston, Dallas, San Jose, Raleigh-Durham, as well as traditional young professional magnets like New York, Chicago, Los Angeles, and San Francisco. Within these broad areas, there will probably also be movement to outer suburbs and exurbs, though at reduced levels, and accompanied by a further 'filling in' of their vibrant urban cores."
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