Steep monthly declines in public and private nonresidential construction spending offset a surge in homebuilding in July, while industry employment decreased compared to July 2019 levels in two-thirds of the nation’s metro areas, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said many commercial construction firms were likely to continue shedding jobs without needed federal coronavirus relief measures.
“The dichotomy between slumping nonresidential projects—both public and private—and robust homebuilding seems sure to widen as the pandemic continues to devastate state and local finances and much of the private sector,” said Ken Simonson, the association’s chief economist. “Without new federal investments in infrastructure and other measures to boost demand for nonresidential construction, contractors will be forced to let more workers go.”
Construction spending in July totaled $1.36 trillion at a seasonally adjusted annual rate, a gain of 0.1% from June. A 1.2% drop in nonresidential spending nearly canceled out a 2.1% jump in residential spending, which was boosted by growth in both single-family (3.1%) and multifamily construction (4.9%).
Public construction spending decreased by 1.3%, dragged down by a 3.1% drop in highway and street construction spending and a 3.0% decline in educational construction spending, the two largest public segments. The next-largest segment, transportation facilities, also contracted, by 1.6 percent.
Private nonresidential construction spending slid 1.0% from June to July. The largest segment, power construction, dipped 0.1%. Among other large private spending categories, commercial construction—comprising retail, warehouse and farm structures—slumped 3.2%, while manufacturing construction rose 0.2% and office construction fell 0.7%.
Construction employment declined from July 2019 to July 2020 in 238, or 66%, out of 358 metro areas, increased in 90 areas (25%) and held steady in 30. New York City lost the most construction jobs (-26,500, -16%), while the steepest percentage loss occurred in Brockton-Bridgewater-Easton, Mass. (-36%, -2,100 jobs). Baltimore-Columbia-Towson, Md. added the most construction jobs over the year (4,800, 6%), while Walla Walla, Wash. had the largest percentage gain (25%, 300 jobs).
Association officials said that in addition to the new spending and metro employment data, the association is releasing the results of its annual workforce survey tomorrow that will underscore the need for new federal recovery measures. The construction officials called on Congress and the Trump administration to enact new infrastructure investments, pass a one-year extension to the current surface transportation law with additional transportation construction funding and enact liability reforms to shied firms that are protecting workers from the coronavirus from needless lawsuits.
“Without new federal relief measures, the industry’s limited recovery will likely be short lived,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress and the President should be taking advantage of current market conditions to rebuild our infrastructure, restore lost jobs and reinvigorate the economy.”
View the metro employment data, rankings, highs and lows, and top 10.
Related Stories
Market Data | May 2, 2018
Construction employment increases in 245 metro areas between March 2017 & 2018, as trade fights & infrastructure funding shortfalls loom
Houston-The Woodlands-Sugar Land, Texas and Weirton-Steubenville, W.Va.-Ohio experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines.
Market Data | May 2, 2018
Nonresidential Construction down in March, private sector falters, public sector unchanged
February’s spending estimate was revised roughly $10 billion higher.
Market Data | Apr 30, 2018
Outlook mixed for renewable energy installations in Middle East and Africa region
Several major MEA countries are actively supporting the growth of renewable energy.
Market Data | Apr 12, 2018
Construction costs climb in March as wide range of input costs jump
Association officials urge Trump administration, congress to fund infrastructure adequately as better way to stimulate demand than tariffs that impose steep costs on contractors and project owners.
Market Data | Apr 9, 2018
Construction employers add 228,000 jobs over the year despite dip in March
Average hourly earnings increase to $29.43 in construction, topping private sector by nearly 10%; Association officials urge updating and better funding programs to train workers for construction jobs.
Market Data | Apr 4, 2018
Construction employment increases in 257 metro areas between February 2017 & 2018 as construction firms continue to expand amid strong demand
Riverside-San Bernardino-Ontario, Calif. and Merced, Calif. experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines in construction employment.
Market Data | Apr 2, 2018
Construction spending in February inches up from January
Association officials urge federal, state and local officials to work quickly to put recently enacted funding increases to work to improve aging and over-burdened infrastructure, offset public-sector spending drops.
Market Data | Mar 29, 2018
AIA and the University of Minnesota partner to develop Guides for Equitable Practice
The Guides for Equitable Practice will be developed and implemented in three phase.
Market Data | Mar 22, 2018
Architecture billings continue to hold positive in 2018
Billings particularly strong at firms in the West and Midwest regions.
Market Data | Mar 21, 2018
Construction employment increases in 248 metro areas as new metal tariffs threaten future sector job gains
Riverside-San Bernardino-Ontario, Calif., and Merced, Calif., experience largest year-over-year gains; Baton Rouge, La., and Auburn-Opelika, Ala., have biggest annual declines in construction employment.
