The value of seasonally adjusted “new construction starts in May retreated 16% from the previous month,” McGraw-Hill Construction (MHC) reported on Thursday, based on data it collected. “The decline followed substantial gains for total construction in March (up 23%) and April (up 11%), which reflected the lift coming from two massive nuclear power projects [$8.5 billion each for the two Vogtle plants in Georgia in March and the two Summer plants in South Carolina in April]. Without a similar lift in May, combined with a pullback for public works, the nonbuilding construction sector fell sharply. At the same time, nonresidential building in May showed improvement for the second month in a row, strengthening after weak activity in the early months of 2012, while residential building in May continued its moderate upward path. During the first five months of 2012, total construction starts on an unadjusted basis [were] up 6% from the same period a year ago…
If the entries for the Vogtle and Summer projects are excluded from March and April, then the pattern for total construction starts would be the following—March, down 3%; April, up 14%; and May, up 4%. ‘Excluding the lift coming from this year’s nuclear power projects, the pattern for construction starts shows a loss of momentum through March, followed by strengthening activity in April and May,’ stated Robert A. Murray, vice president of economic affairs for [MHC]. ‘The picture of a construction market that’s struggling to achieve upward momentum, with gains for some project types but losses for other project types, continues to hold true. Housing is edging upward, as earlier advances for multifamily housing are now being joined by gradual growth for single-family housing. The commercial building sector has registered slight improvement from the extremely depressed amount back in 2010, but its upturn remains tenuous. On the down side, the institutional structure types and public works construction still face diminished funding from the federal, state, and local levels of government.’”
“There were 3.1 million job openings [seasonally adjusted] on the last business day of April, down from 3.7 million in March,” but up from 3.0 million in April 2011, the Bureau of Labor Statistics (BLS) reported on Tuesday. “The hires rate (3.1 per [100 employees]) and separations rate (3.1%) were essentially unchanged in April” and remained close to April 2011 rates of 3.1 and 2.9 respectively. Job openings in construction were essentially flat in April but down 24% from a year earlier. The hire rate in construction was 5.1% in April and March 2012, down from 6.2% in April 2011. The separations rate was 5.3% in April, exceeding the hire rate and foreshadowing the 28,000 drop in employment for May that BLS reported on June 1. The separations rate increased from 5.1% in March but fell from 6.5% in April 2011.
The results of the latest Manpower Group quarterly survey of hiring plans of 18,000 U.S. employers, released on June 12, “suggest that employers expect hiring to remain relatively stable during Quarter 3 2012 compared to Quarter 2 2012 and a slight increase in the hiring pace compared to one year ago at this time. U.S. employers have now conveyed a positive outlook for 11 straight quarters… For Quarter 3 2012, employers have a positive outlook in all of the 13 industry sectors included in the survey.” Construction was one of seven sectors in which the hiring outlook improved from last quarter.
“Ports on the Atlantic and the Gulf of Mexico, whose harbors have been too shallow to accommodate [giant containerships that will fit through the Panama Canal after its widening is completed in 2-3 years], are gearing up to spend more than $40 billion over the next five years to deepen their shipping channels and make other upgrades, according to Aaron Ellis, director of communications for the American Association of Port Authorities,” USA Today reported on Monday. “The ports of Norfolk, Va., and Baltimore have completed projects that put them in position to be the first to receive the big ships, some of them 1,110 feet long with the capacity to haul up to 13,000 boxcar-size freight containers, Ellis said. Elsewhere, the work is in varying stages: The Army Corps of Engineers is expected to finish dredging a 50-foot deep channel to three terminals in New York Harbor by the end of the year and to the main New York terminal by 2014, according to New York/New Jersey Port Authority spokesman Hunter Pendarvis.
The authority has committed $1 billion to raise the Bayonne Bridge by 64 feet to allow the bigger ships to pass under, he said. Miami-Dade County reached an agreement in April with environmental groups that had raised concerns about the Port of Miami's Deep Dredge project. It is expected to be able to handle the big ships by 2014 or soon thereafter, according to Ellis. The Corps of Engineers completed a study in April finding that Savannah, Ga.'s proposed $652-million channel deepening project is viable. The Corps is in the midst of a study of Charleston harbor, said Jim Newsome, president and CEO of the South Carolina Ports Authority. Philadelphia and Corpus Christi are currently involved in dredging projects, according to Ellis. Boston, Jacksonville, Canaveral and Freeport, Texas, are among other ports pursuing deeper channels, he said.” Railroads also are investing in port-related track improvements.
