Constructor - September/October 2016 - 35

SIMONSON SAYS Spending Outlook Stays Bright Despite Ostensible Spring Slump BY KEN SIMONSON CHIEF ECONOMIST, AGC OF AMERICA CONTRACTORS IN MOST OF the country have been busy all year and expect to have plenty of projects to execute or bid on in 2017. That reality outweighs an apparent slowdown last spring, as reflected in government spending and employment data for the industry. Construction spending reached a postrecession high of $1.18 trillion at a seasonally adjusted annual rate in March, the Census Bureau reported on July 1. (Seasonal adjustment removes the effect of regular weather- or holiday-related variations to make underlying trends more apparent. An annual rate - multiplying the monthly total by 12 - allows ready comparison with fullyear totals.) Spending dropped 2 percent in April and another 0.8 percent in May, according to initial estimates. Similarly, construction employment peaked at 6,665,000, seasonally adjusted, in March, the Bureau of Labor Statistics (BLS) reported on July 8. Payrolls shrank by 16,000 in April and 6,000 in May before flattening out in June, preliminary estimates show. However, these apparent slowdowns may be the result of exceptionally mild winter conditions in much of the country in 2016, which allowed work to continue through the winter or begin earlier in the year than is typical. Conversely, extreme snow, ice and cold in early 2015 probably pushed spending and hiring into the spring that year and made same-month comparisons in 2016 look feeble. Indeed, year-to-date spending for the first five months of 2016 combined was 8.2 percent higher than in January-May 2015. That constitutes only a modest slowdown from the 10.6 percent gain recorded in all of 2015. Construction employment in June was 3.4 percent higher than in June 2015, double the 1.7 percent increase in total nonfarm @Constr uctor Ma g payroll employment. Other data suggest industry employment might have risen even more if contractors could have found workers with the necessary qualifications. In June, the number of unemployed workers whose last job was in construction (417,000) and their unemployment rate (4.6 percent) hit the lowest June levels since 2000. Another BLS report showed there were 188,000 job openings in construction, seasonally adjusted, at the end of May, the largest May total since 2007, and the ratio of openings to jobs filled during the month (hires) was the highest in the 17-year history of BLS's Job Openings and Labor Turnover Survey. As for the outlook, reports from contractors and several forward-looking indicators point to continued strong demand for projects. The data-gathering firm ConstructConnect reported that the value of nonresidential construction starts rose 11 percent from the first half of 2015 to the first six months of 2016. Earlier, competitor Dodge Data & Analytics reported that the value of all starts (including residential) fell 12 percent year-to-date from January-May 2015 to the same period in 2016 but that the earlier year was boosted by several supersized oil and gas projects. Aside from those, starts were virtually unchanged. Looking further ahead, the Dodge Momentum Index in June hit its highest level since early 2009. Dodge calls the index "a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year." Likewise, in May, the American Institute of Architects' Architecture Billings Index (ABI) "accelerated to its highest score in nearly a year. As a leading economic indicator of construction activity, the ABI reflects the approximate nine-to-12 month lead time between architecture billings and construction spending." Despite occasional ups and downs in all of the above indicators, it appears contractors will stay busy for the remainder of 2016 and well into 2017, if not beyond. Their biggest challenge will be finding enough workers with the right skills, not finding enough work for them to perform. ◆ S E P T E MB E R / O C T O B E R 2 0 1 6 | www.constructormagazine.com 35 http://www.constructormagazine.com/

Table of Contents for the Digital Edition of Constructor - September/October 2016

Editor’s Note
President’s Message
CEO’s Letter
Cybercrime: Why You’re Almost Certainly at Risk
Building the Economy: The True Value of Measuring Economic Impact
All Eyes on November
Constructing an Experience: New Demands in Retail Design
Simonson Says
Knocking Green Standards Out of the Park
Managing the Risks of Green Building
Construction Leadership Council: A Launch Pad for Careers and Industry Leadership
AGC in Action
Member and Chapter News
Legislative and Regulatory News
Technology Toolbox
2016 Professional Services Guide
Products & Services Marketplace
Index to Advertisers
Final Inspection
Constructor - September/October 2016 - cover1
Constructor - September/October 2016 - cover2
Constructor - September/October 2016 - 3
Constructor - September/October 2016 - 4
Constructor - September/October 2016 - 5
Constructor - September/October 2016 - 6
Constructor - September/October 2016 - 7
Constructor - September/October 2016 - 8
Constructor - September/October 2016 - Editor’s Note
Constructor - September/October 2016 - 10
Constructor - September/October 2016 - President’s Message
Constructor - September/October 2016 - 12
Constructor - September/October 2016 - CEO’s Letter
Constructor - September/October 2016 - Cybercrime: Why You’re Almost Certainly at Risk
Constructor - September/October 2016 - 15
Constructor - September/October 2016 - 16
Constructor - September/October 2016 - 17
Constructor - September/October 2016 - 18
Constructor - September/October 2016 - Building the Economy: The True Value of Measuring Economic Impact
Constructor - September/October 2016 - All Eyes on November
Constructor - September/October 2016 - 21
Constructor - September/October 2016 - 22
Constructor - September/October 2016 - 23
Constructor - September/October 2016 - 24
Constructor - September/October 2016 - 25
Constructor - September/October 2016 - Constructing an Experience: New Demands in Retail Design
Constructor - September/October 2016 - 27
Constructor - September/October 2016 - 28
Constructor - September/October 2016 - 29
Constructor - September/October 2016 - 30
Constructor - September/October 2016 - 31
Constructor - September/October 2016 - 32
Constructor - September/October 2016 - 33
Constructor - September/October 2016 - 34
Constructor - September/October 2016 - Simonson Says
Constructor - September/October 2016 - Knocking Green Standards Out of the Park
Constructor - September/October 2016 - 37
Constructor - September/October 2016 - Managing the Risks of Green Building
Constructor - September/October 2016 - 39
Constructor - September/October 2016 - 40
Constructor - September/October 2016 - 41
Constructor - September/October 2016 - Construction Leadership Council: A Launch Pad for Careers and Industry Leadership
Constructor - September/October 2016 - 43
Constructor - September/October 2016 - 44
Constructor - September/October 2016 - 45
Constructor - September/October 2016 - 46
Constructor - September/October 2016 - AGC in Action
Constructor - September/October 2016 - 48
Constructor - September/October 2016 - 49
Constructor - September/October 2016 - 50
Constructor - September/October 2016 - Member and Chapter News
Constructor - September/October 2016 - 52
Constructor - September/October 2016 - 53
Constructor - September/October 2016 - 54
Constructor - September/October 2016 - 55
Constructor - September/October 2016 - 56
Constructor - September/October 2016 - Legislative and Regulatory News
Constructor - September/October 2016 - 58
Constructor - September/October 2016 - Technology Toolbox
Constructor - September/October 2016 - 60
Constructor - September/October 2016 - 2016 Professional Services Guide
Constructor - September/October 2016 - 62
Constructor - September/October 2016 - 63
Constructor - September/October 2016 - 64
Constructor - September/October 2016 - 65
Constructor - September/October 2016 - 66
Constructor - September/October 2016 - 67
Constructor - September/October 2016 - 68
Constructor - September/October 2016 - 69
Constructor - September/October 2016 - 70
Constructor - September/October 2016 - Products & Services Marketplace
Constructor - September/October 2016 - 72
Constructor - September/October 2016 - 73
Constructor - September/October 2016 - Index to Advertisers
Constructor - September/October 2016 - 75
Constructor - September/October 2016 - 76
Constructor - September/October 2016 - 77
Constructor - September/October 2016 - Final Inspection
Constructor - September/October 2016 - cover3
Constructor - September/October 2016 - cover4
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