Real (net of inflation) gross domestic product increased 2.0% in the third quarter of 2010 at a seasonally adjusted annual rate, up from 1.7% in the second quarter, according to the advance estimate today by the Bureau of Economic Analysis. Real investment in private nonresidential structures rose 3.9% after falling for eight straight quarters. Real residential investment slumped 29%, after rising 26% in the second quarter, reflecting the end of the homebuyer tax credit in April. Real government investment in structures rose 8.8%, following a 9.0% second-quarter gain, boosted by federal spending on stimulus projects, military base realignment and Gulf Coast hurricane recovery and preparation. The price indexes for the three types of investment rose at seasonally adjusted annual rates of 2.6% for private nonresidential, -0.5% for residential, and 1.9% for government structures.
The employment cost index, a quarterly gauge of pay and benefits costs, rose 0.5% for all civilian workers in the third quarter, not seasonally adjusted (up from 0.4% in the second quarter), and 1.9% over the past four quarters, the Bureau of Labor Statistics (BLS) reported today. The index for construction compensation costs climbed 0.4% for the quarter (up from 0.2%) and 1.2% over four quarters. The index for construction wages and salaries also increased 0.4% for the quarter (up from 0.1%) and 0.9% for the year. (BLS does not break out benefits by industry.)
Construction employment fell from September 2009 to September 2010 in 236 of 337 metro areas for which BLS data is available, increased in 56 and was constant in 45, an AGC analysis on Thursday showed. The number of metro areas with increases matched the August 2009-2010 total. The BLS numbers are not seasonally adjusted and combine mining and logging with construction in most areas to avoid disclosure of data for industries with few employers. Columbus, Ohio added more jobs (2,200 combined, 7%) than any other metro area while Hanford-Corcoran, California added the highest percentage (33%, 300 combined). Other areas adding jobs included Pittsburgh (1,900 construction-only, 3%); Bethesda-Rockville-Frederick, Maryland (1,600 combined, 5%); Kansas City, Kansas (1,500 combined, 8%); and Lawton, Oklahoma (300 combined, 18%). Chicago-Naperville-Joliet lost the most jobs (-20,500 construction-only, -15%). Napa, Calif., lost the highest percentage (-33%, -1,000 combined). Other areas with large declines included Las Vegas-Paradise (-13,000 construction-only, -22%); Los Angeles-Long Beach-Glendale (-9,700 construction-only, -9%); Houston-Sugar Land-Baytown (-9,100 construction-only, -5%); Seattle-Bellevue-Everett (-8,500 construction-only, -11%); and Riverside-San Bernardino-Ontario, Calif. (-7,800 construction-only, -12%).
"Reports from the 12 Federal Reserve Districts suggest that, on balance, national economic activity continued to rise, albeit at a modest pace, during the reporting period from September to early October," the Fed stated in its October 20 "Beige Book," a summary of informal soundings of regional business conditions. Districts are referred to by the name of their headquarters cities. With regard to manufacturing, the Fed reported, "Demand for construction-related products remained weak....Future capital spending plans appeared to be limited, except...in the St. Louis District where several manufacturers reported plans to build new plants or expand....there were some reports from architectural firms that activity had picked up....Single-family construction activity was at very low levels, but had improved somewhat in the Chicago, St. Louis and Kansas City Districts. Atlanta reported a softening of construction activity overall, and Minneapolis said single-family building activity was mixed across metros. Builders in the Dallas District said they had pulled back on starts considerably after the run-up earlier in the year. Respondents' outlooks suggested sales and construction would remain subdued through year-end. There were some reports that tighter credit standards for buyers and small builders, along with general economic uncertainty, were stalling activity. Conditions in the commercial real estate sector remained subdued. Reports suggested rental rates continued to decline for most commercial property types. The one exception was the apartment sector, where higher leasing activity led to fewer concessions, most notably in Manhattan. Office, industrial and retail rental markets remained weak, although there were a few reports of slight increases in leasing activity in the Richmond, Chicago and Dallas Districts. Commercial property sales were low overall, but contacts in the Chicago and Dallas Districts said investment demand for distressed commercial properties remained strong. Given lackluster demand for commercial space, nonresidential construction activity was limited to mostly public projects, according to District reports. Industry contacts appeared to believe that the commercial real estate and construction sectors would remain weak for some time....Commercial real estate lending remained subdued and loan standards were still tight."
Mass layoffs (events involving 50 or more employees of a single employer) declined sharply overall and for construction in September, BLS reported on October 22. The number of events fell 33% overall, not seasonally adjusted, from September 2009, and 47% for construction. The number of initial claimants for unemployment insurance fell 37% overall and 42% for construction.
The construction industry reported 71,700 fewer nonfatal workplace injuries and illnesses in 2009 than in 2008, a 22% decline, lowering the incidence rate by 0.4 cases to 4.3 cases per 100 workers, BLS reported on October 21.
- Industry Priorities
- Education
- News
- Connect
- Benefits
- Events
- Shop