Construction employment climbs in 45 states in February; Dodge, ConstructConnect reports diverge
Two reports on construction starts in February point in different directions for the first two months of 2023 compared to the same months of 2022. Vagaries of winter weather mean that underlying trends may be measured better year-to-date than by comparing single months. in current dollars (i.e., not inflation-adjusted) slumped by 17%, Dodge Construction Network reported on Monday. Year-to-date plummeted 31%, sank 14%, and increased 6%. For the month, “single-family units posted a gain for the first time in 13 months, and manufacturing starts continued to be very robust, showing signs of promise early into 2023,” chief economist Richard Branch wrote. “However, the downturn in commercial and institutional building starts could very well be the beginning of an anticipated slowdown as the construction sector pulls back in the face of higher interest rates and lagging economic growth.”
The in current dollars increased 7.8% year-to-date in January and February compared to the first two months of 2022, data firm ConstructConnect reported on March 17. plunged 30% year-to-date, with single-family down 33% and apartments down 24%. leaped 51% year-to-date, with the largest component—industrial (manufacturing)—starts soaring 239%, institutional starts up 48%, and commercial starts down 3.6%. () starts rose 29% year-to-date, with increases for roads of 39%; water/sewage, 24%; bridges, 9.5%; power and miscellaneous civil, 9.0 %; airports, 145%; and dams/marine, 40%. “Substantial dollar amounts made available by Washington are driving infrastructure undertakings,” chief economist Alex Carrick wrote. “In nonresidential building, however, ongoing upticks in schools and hospitals are contending with further downdrafts by private offices and retail.”
The Index (ABI) registered a score of 48.0 in February, down from 49.3 in January and the fifth-straight reading below 50, the American Institute of Architects (AIA) reported on Wednesday. AIA calls the index “a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.” The ABI is derived from the share of responding architecture firms that report a gain in billings over the previous month less the share reporting a decline in billings, presented on a 0-to-100 scale. Any score below 50 means more firms reported decreased billings than increased billings. Readings for practice specialties (based on three-month averages) varied: mixed practice, 57.0 (up from 56.2 in January); institutional, 46.9 (down from 47.8); residential (mainly multifamily), 46.2 (up from 45.2); and commercial/industrial, 45.8 (down from 46.4). An index of slipped to 51.3 from 53.4 in January.