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April 2016 Economic News
Single-family Construction Up, Multifamily Mixed

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Single-family housing starts in February registered the highest number of units, 822,000, since November 2007. The 7.2% gain lifted overall housing starts 5.2% month over month. Multifamily starts of five units or more pitched in with a 2.4% rise.

For the third straight month, the Dodge Momentum Index, which measures nonresidential building projects in planning, was up month over month though by a mere 0.5%. Commercial projects registered a 1% gain but the institutional side was down 0.1%.

Though the unemployment rate for the construction industry inched up 0.2% to a reading of 8.7% in February, 19,000 new net jobs were added, led by the residential specialty trade sector that accounted for 13,800 of those positions. That brings the total number of new jobs created by that sector in the last 12 months to 122,900.

Construction input prices continued inching downward as February's 0.6% decline marked the eighth straight month of decreases month over month. On a yearly basis, input prices have fallen 3.7%. However, concrete product prices posted increases of 0.3% month over month and 2.5% year over year.

National Numbers
Architecture Billing Index (ABI): 50.3,
up from 49.6 in January
New projects inquiry index: 59.5,
up from 55.3 in January
Source: American Institute of Architects
Single-family: +0.4%
Multifamily: -8.4%
Combined Total: -3.1%

Single-family: +16.8%
Multifamily: -7.6%
Combined Total: +6.3%

Source: U.S. Census Bureau
Single-family: +7.2%
Multifamily: +2.4%
Combined Total: +5.2%

Single-family: +37.0%
Multifamily: +16.8%
Combined Total: +30.9%

Source: U.S. Census Bureau
Single-family: +6.1%
Multifamily: -25.2%
Combined Total: -4.2%

Single-family: +22.3%
Multifamily: +6.5%
Combined Total: +17.5%

Source: U.S. Census Bureau
Home Sales
Existing Homes
-7.1% from January 2015
+2.2% from February 2015

Source: National Association of Realtors

New Homes
+2.0% from January 2015
-6.1% from February 2015

Source: U.S. Census Bureau

Regional Report
Of the 358 metro areas measured by the Associated General Contractors of America, 243 of them experienced construction employment increases between January 2015 and January 2016. Anaheim-Santa Ana-Irvine, Calif., led the list in net jobs gained with 12,400. El Centro, Calif., saw the biggest percentage increase at 61%. Of the 72 metro areas that posted declines, Odessa, Texas lost the most, 3,800, followed by nearby Midland, which shed 3,500 jobs.

On a state-by-state basis, 44 of them and the District of Columbia ended the same period in positive territory. At 15.6%, Hawaii saw the biggest jump followed by Rhode Island (12.7%), Nevada (10.2%) and Massachusetts (9.9%). The six states that lost construction jobs over the last year were led by North Dakota in both total number (-5,300) and percentage (-14.4). The other five states were Alaska (-8.7%), West Virginia (-7.4%), Wyoming (-5.1%), Kansas (-2.2%) and Pennsylvania (-1.5%).

HomeUnion, a firm specializing in helping individuals invest in single family rental properties, recently reported on the forecasted growth in 2016 of monthly rental payments in 44 markets across the U.S. The top ten, in descending order, of projected percentage of growth are: San Jose, Calif.; Orlando; Seattle; San Diego; San Francisco; Denver; Charlotte, N.C.; Austin; San Antonio; and Portland. Ore.

The Northeast region was again this month (February's statistics) the most volatile of the four regions. The big jump in permits in December due to New York state developers wanting to qualify for the expiring 421a tax break, which in turn was credited for a big drop in permits in the Northeast in January, can be viewed as a major factor for the region's jump in permits in February and its drop in combined starts.
(National averages in parenthesis.)
Combined Permits
Month-Over-Month (-3.1)

Northeast: +40.4%

Combined Permits
Year-Over-Year (+6.3)

Northeast: +35.9%

Single-Family Permits
Year-Over-Year (+16.8)

Northeast: +44.4%

Combined Starts
Month-Over-Month (+5.2)

Northeast: -51.3%

Combined Starts
Year-Over-Year (+30.9)

Midwest: +77.5%

Single-Family Starts
Year-Over-Year (+37.0)

Northeast: +154.5%
Midwest: +88.9%

A recent survey from the National Center for Construction Education and Research found that skilled craft professionals pulled in average annual salaries in 2015 of between $47,000 to almost $89,000. These totals were considered to be in the high range. Project managers made the most money, before overtime, per diem, bonuses and other incentives, with a national average of $88,675. Heavy equipment operators averaged $61,091 for the year, and masons' earnings were calculated to be $54,860.

"We conducted certain professional surveys and we asked, relative to what was considered normal before the recession, where their revenues are currently. And over two thirds of the companies indicated that they had reached the pre-recession normal levels or exceeded them quite significantly. In fact, about 20% mentioned that they had significantly exceeded those levels." - Nino Sitchinava, principal economist at Houzz

As seen in LC/DBM magazine, April 2016.

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