Construction Economic Outlook
Recent News and Numbers
New home sales in April came in at a 619,000-unit annual rate, which set a new post-recession high, bested March's numbers by 16.6 percent and April 2015's numbers by 23.8 percent. This good report after several months of less than stellar results was accompanied by the news that the previous three months' numbers were revised higher, bringing year-to-date sales up 9.0 percent.
Construction employment between April 2015 and April 2016 grew in 42 states and the District of Columbia according to the Associated General Contractors of America. Representatives of that organization say that they expect companies in many parts of the country to add jobs, and that lack of qualified workers is still a concern.
For the second quarter of this year, the Nonresidential Construction Index hit 61.3, which is 5.7 points above the first quarter. In specific areas of the report, the index for the overall economy was up 8.9 points at 65.4, construction business tallied 76, the highest score in four quarters, but the scores for costs of materials and labor dropped, 13 and 12 points respectively, indicating that contractors are expecting to pay more for both.
Architecture Billings Index (ABI): 50.6 - down from 51.9
New Projects Inquiry Index: 56.9 - down from 58.1
Scores above 50 indicate overall month-to-month increases.
Source: American Institute of Architects
+1.7% from March
+6.0% from April 2015
Source: National Association of Realtors
+16.6 % from March
+23.8% from April 2015
Source: U.S. Census Bureau REGIONAL REPORT
The growth of construction employment across the country was somewhat soft between March and April as only 23 states added workers with California leading the way (12,000 jobs), followed by Florida (4,400), Wisconsin (3,500), Iowa (3,300) and Connecticut (2,400). At 4.3 percent, Idaho increased construction employment at the highest rate. Tennessee (-3,500 jobs) was the biggest loser followed by Virginia (-3,000), Michigan (-2,700) and Kentucky (-2,300).
Victor Mendez, the deputy secretary of the U.S. Department of Transportation recently announced that their Smart City Challenge, "a competition to create a first of its kind city that uses data, technology and creativity to shape how people and goods move in the future," has narrowed the finalists down to Austin, Texas; Columbus, Ohio; Denver; Pittsburgh; Kansas City; San Francisco and Portland, Oregon. The winner will receive up to $40 million from the DOT plus other contributions from the private sector to implement their plan that will then be a test case for other cities throughout the country.
New home sales month-over-month (+16.6)
New home sales year-over-year (+23.8)
A recent online survey of nearly 320 lawn care providers found that 79 percent of them oppose the proposed increase to $15-an-hour for the federal minimum wage. The survey was conducted by LawnStarter, an online service that helps people find, schedule, pay for and manage lawn care services. As to what effects an increase would have on their businesses, 79 percent said they would need to raise prices, 36 percent reported they would have to lay off workers, 21 percent noted they would need to reduce other expenses, and 12 percent replied they would have to shut their doors.
"The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow," Lawrence Yun, chief economist, National Association of Realtors