New construction starts rose 5% in December, seasonally adjusted, McGraw-Hill Construction (MHC) reported on Friday, based on data it compiled. But, for all of 2009,"the 26% annual decline for construction starts was the steepest in at least the past 40 years," Robert Murray, vice president of economic affairs for MHC, said. "At the same time, the bottom for construction starts was reached in February, to be followed by an up-and-down pattern during 2009 which suggests that the transition has been made from steady decline to at least low-level stability. Single-family housing, while still remaining at a very low volume, began to show some improvement as 2009 progressed. Funding from the federal stimulus bill helped to produce gains for highways and bridges, as well as a pickup for a few project types such as courthouses. However, commercial building and multifamily housing registered particularly severe declines in 2009, and even the previously resilient institutional building sector lost momentum. Going into 2010, more improvement is expected for housing and public works, but commercial and institutional building will continue to be adversely affected by weak employment, tight bank lending, and the eroding fiscal health of states and localities." MHC said nonresidential building starts were unchanged in December but fell 33% for 2009 as a whole, with stores and shopping centers, + 52% and -42%; warehouses, 15% and -62%; hotels, -32% and -66%; offices, -15% and -37%; manufacturing, 143% and -66%; education, - 3% and 19%; healthcare, 8% and -36%; and public buildings, -60% and 10%. Residential building in December "edged up 1%" but tumbled 31% for the year, with single-family, 2% and -23%; and multifamily, 1% and -56%. Nonbuilding construction climbed 15% in December but slid 9% for the year, with highways "steady" and +5%; bridges, 23% and 10%; sewers, 31% and -16%; water supply, 17% and -15%; and electric utilities, 27% and -41%.
Seasonally adjusted unemployment by state rose in December in 43 states and the District of Columbia, fell in four states and was unchanged in three, the Bureau of Labor Statistics (BLS) reported on Friday. The rate was higher everywhere than in December 2008. Seasonally adjusted nonfarm payroll employment fell for the month in 39 states and rose in 11 states plus D.C. For the year, employment fell in all states but rose in D.C. Construction employment fell in December in 40 states, rose in six and was unchanged in four plus D.C. For the first time since the recession began in 2007, employment fell everywhere compared to a year earlier. The largest 12-month percentage declines were in Nevada, -28%; Wyoming, -24%; Tennessee and Montana, -20%. The smallest declines were in Louisiana, D.C., Oklahoma and West Virginia, -4%. (BLS combines data for construction with mining and logging in D.C., Tennessee and five other states.)
"In 2009, the union membership rate-the percent of wage and salary workers who were members of a union-was 12.3%, essentially unchanged from 12.4% a year earlier," BLS reported on Friday. "The number of wage and salary workers belonging to unions declined by 771,000 to 15.3 million, largely reflecting the overall drop in employment due to the recession. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1%, and there were 17.7 million union workers....Private-sector industries with high unionization rates included transportation and utilities (22.2%), telecommunications (16.0%), and construction" (14.5%, representing 958,000 workers out of 6,613,000). In 2008, 15.6%, or 1,195,000 of 7,652,000 employees in construction, were union members. Thus, from 2008 to 2009, overall construction employment fell by 1,039,000 (14%) and union employment by 237,000 (20%). Wages averaged $744 per week in construction; $1,072 for union members and $698 for nonmembers. Overall wages rose 4.5% from $712 in 2008. Union wages rose 5.7% from $1,014; nonunion wages rose 4.5% from $668. The increases reflect heavier layoffs among lower-paid workers as well as actual increases.
Consulting firm Lodging Econometrics predicted on Monday, "just 717 hotels, representing 82,620 rooms, will open in 2010. This is a 56% drop from 2009....LE's forecasted declines for 2010 represent a steep drop-off from earlier forecasts and are a result of the near-disappearance of lending. [The 767] projects under construction [95,900 rooms in the fourth quarter] are the lowest level recorded in over four years and are expected to continue to fall throughout 2010....construction starts [119 projects/11,623 rooms, are] the lowest totals since early 2002....Project cancellations and postponements remain at historical highs. Meanwhile, new project announcements have fallen to five-year lows."
The quarterly survey of 75 corporate economists released by the National Association for Business Economics on Monday found a small net increase in demand at their firms in the fourth quarter and slightly more optimistic forecasts for corporate pricing, capital investment and hiring and economic growth. However, of the 43 respondents who forecasted their firms' plans for spending on structures in the next 12 months, 9 predicted decreases vs. 6 who expected increases.
"Falling U.S. electricity production in the past two years is frustrating the utility industry and shaking up timetables for some major infrastructure projects," the Wall Street Journal reported on January 14. The Edison Electric Institute, a trade group for investor-owned utilities, "counts 43 coal plant cancellations of deferrals since 2008 and 15 new projects announced." Some plants are being replaced by gas-fired plants or wind farms. "The wind-power industry has been one of the main beneficiaries under the American Recovery and Reinvestment Act of 2009," the Journal reported on January 13, citing consultant Emerging Energy Research's forecast that wind-power installation in 2010 will match 2009.
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