Data Digest: Most states add jobs overall, but not in construction; MHC says March starts were flat

View March state employment tables here.  Seasonally adjusted nonfarm payroll employment increased in 38 states in March and decreased in 12 states and the District of Columbia, the Bureau of Labor Statistics (BLS) reported on Tuesday. Compared with March 2010, employment increased in 47 states and D.C. and decreased by small amounts in 3 states: Kansas, -0.5%; New Jersey and New Mexico, less than -0.1% each. The biggest year-over-year percentage gains were in North Dakota, 4.2%; Vermont, 2.8%; Alaska and Texas, 2.4% each. In contrast, construction employment rose in only 19 states in March, fell in 27 plus D.C., and was level in four (Hawaii, Indiana, Iowa and New Hampshire), an analysis by AGC showed. Over the year, construction employment climbed in just 16 states plus D.C., dropped in 33 states and held steady in Vermont. The largest year-over-year percentage gains in construction employment were in Tennessee, 6.3%; Texas, 5.1%; Wyoming, 5.3%; and Delaware, 4.2%. The largest decreases were in West Virginia, -11%; Wisconsin, -8.0%; Georgia, -7.6%; and Nevada, -7.5%. (BLS combines mining and logging with construction in six states plus D.C. to avoid disclosing data about industries with few employers.) “New construction starts in March came in at…essentially the same pace as February,” McGraw-Hill Construction (MHC) reported on Wednesday, based on data it compiled. “While total construction was unchanged from the prior month, this steady pattern came as the result of divergent behavior by construction’s three main sectors. Nonresidential building in March increased sharply, following its subdued activity earlier this year, but declines were registered by housing and nonbuilding construction (public works and electric utilities). Through the first three months of 2011, total construction on an unadjusted basis was…down 10% from the same period a year ago.” Robert Murray, MHC’s vice president of economic affairs, commented, “Public works had initially offset some of the weakness shown by other types of construction, but it’s now beginning to lose momentum, given waning support from the federal stimulus act, tight state budgets, and cutbacks in federal funding included in the recently approved fiscal 2011 appropriations. While multifamily housing has strengthened in hesitant fashion, single-family housing continues to be stalled. For nonresidential building, there’s still the downward pull coming from the institutional categories, but on the plus side commercial building seems to have already reached bottom, and the gains for commercial building in March would appear to be a positive development going forward. The note of caution for commercial building is that market fundamentals such as occupancies have only just begun to improve, and banks remain very cautious with regard to lending for new projects.” One construction category that appears to be hot is data centers. “Rick Einhorn, director of worldwide critical facilities service at [Hewlett-Packard,] anticipates that 50% of all new data centers will be built modularly, rather than custom designs, by 2013,” the Wall Street Journal reported on Tuesday. “The amount of commercial data-center capacity becoming available, which grew 5% in 2010, is projected to hit double-digit growth rates, up to 11% growth in 2014, according to Tier 1 Research….‘The need now [for new centers] is outstripping the ability of custom to meet it,’ said George Slessman, chief executive of i/o Data Centers LLC, a Phoenix-based builder of data centers.” MHC counts data centers in office construction, “which surged 87% in March, lifted by the start of a $1.1 billion data center in Utah for the National Security Agency…and a $75 million data center in Santa Clara, California.” One supplier of construction plastics warned on Thursday that a producer of ethylene, the raw material for many products, had declared force majeure, meaning it might stop honoring contracts because of supply interruptions. However, also on Thursday, Dow announced that it was finalizing plans to increase its ethylene supply and increase its ethane cracking capabilities at existing U.S. Gulf Coast facilities and to construct a new, world-scale ethylene production plant in the U.S. Gulf Coast, for start-up in 2017. Additionally, “Dow is currently finalizing plans to increase the Company’s propylene supply by constructing a new, world-scale, on-purpose propylene production facility at Dow Texas Operations, for start-up in 2015” and other steps. Other petrochemicals reported in short supply include butadiene, used in tires, gaskets and other rubber products; and polyvinylidene fluoride, used in high-end pipes, coatings and roofing products. “State tax revenues grew by 7.8% in the fourth quarter of 2010,” the Rockefeller Institute of Government reported on Tuesday, based on its own research and Census Bureau data. “This is the fourth consecutive quarter that states reported growth in collections on a year-over-year basis. Forty-two states reported total tax revenue growth during the fourth quarter, with nine states showing double-digit growth. Despite four consecutive quarters of growth, state tax revenues were still slightly lower in the fourth quarter of 2010 than in the same quarter three years earlier. Only 18 states reported higher collections in the fourth quarter of 2010 than in the same quarter of 2007…. Preliminary figures for January and February 2011 indicate continued strength in state tax revenues. Overall collections in 45 early-reporting states showed growth of 9.5% compared to the same months of 2010, and 7.5% compared to the same months of 2009. Local tax revenues declined by 2.3% in the fourth quarter of 2010, mostly driven by declines in property tax collections.” The revenue shortfall in most states, relative to pre-recession peaks, and the drop in property and other local tax collections portend continuing cuts in spending on construction by school districts and other governments.