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Economic Summary
ABI, Employment, Construction Trends, Spending and More


June's Architecture Billings Index marked the fifth straight month of gains in construction design services billings

ABI in June Delivers Best Score in Second Quarter

At 54.2, June's Architecture Billings Index marked the fifth straight month of gains in construction design services billings, with the residential component of the index posting a 12-month high. All of the four regional scores were above 50 led by the South's 54.8. The Northeast had the most impressive gain - from 46.5 to 51.5. The performance of the private residential sector looks to be solid through the end of the year.


Construction Employment Continues to Rebound

An analysis by the Associated Builders and Contractors of the latest employment numbers showed that the construction industry employed 192,000 more workers than the same time last year, and construction unemployment rates were down in 24 states on a year-over-year basis. Vermont led the pack with a rate of 1.5% followed by Iowa (2.2%), Idaho (2.3%), Colorado (2.4%), Indiana and North Dakota (2.5%). New Mexico (10.7%) and Alaska (10.5%) were the only states still in double figures.


Positive Trend in U.S. Construction Forecast to Continue Through Years-end

The Q2 North American quarterly cost report from consultancy firm Rider Levett Bucknall predicts that although the U.S. construction put-in-place in the second quarter ended 1.4 percent below the revised March estimate, the overall construction industry should close out 2017 in good shape. Cited as reasons for this were that the unemployment rate is steady and the Architecture Billing Index score, which indicates future non-residential building activity, is at 54.3 - a gain over the 2016 average.


Predicted Equipment and Software Growth Bumped Up

In the Q2 update to its Economic Outlook, the Equipment Leasing & Finance Foundation revised its forecast for this year's equipment and software investment growth from 2.8 percent to 3.6 percent. The report predicts that investment "will be driven by overall improvements in business confidence and a more positive outlook for the industrial sector," which got the year off to a solid start after a tame 2016. Also noted was, in spite of slow wage growth, the labor market remains strong, consumer confidence is high and most equipment verticals, including construction machinery, should expand this year.


Planning, Spending on Nonresidential Building Posts Gains

The Dodge Momentum Index, which measures the first planning stages of nonresidential projects, rose 1.1% in June thanks to a solid gain of 4.8% in the institutional sector. The Wells Fargo Securities Economics Group predicts that "private nominal nonresidential construction spending should continue to grow this year." Even with the institutional component's strong showing - it is up almost 12 percent relative to last year - and the 13 percent gain in year-to-date spending on commercial and institutional projects combined, the Wells Fargo Group cautions, "the pace is moderating from its breakneck rate registered since 2012."


Construction Spending Matches Last Month

The latest construction spending total essentially equaled the numbers from the previous month although public construction grew by 2.1 percent. Even with the flat total amount, an upward revision to last month's sum helps ease concerns about the most recent numbers. And one area that showed very positive results was spending on public health care construction, which is up 13.7 percent over the year.

At a $1,230.1 billion annual rate, the latest construction spending total essentially equaled the total of the previous month. Public construction grew by 2.1 percent, coming in at $286.9 billion, while the private sector slipped 0.6 percent. Even with the flat numbers, an upward revision to last month's slowdown helps ease the concerns. On a 3-month moving average basis, spending was down 0.2 percent in the latest report. On a positive note, spending on public health care construction is up 13.7 percent over the year.


Additional 16,000 Construction Jobs Come Aboard

According to an Associated Builders and Contractors analysis of the most recent statistics from the U.S. Bureau of Labor, the U.S. construction industry added 16,000 new jobs in June. This represents a growth of 3.1 percent on a year-over-year basis, a much better score than the national average of 1.6 percent gain year-over-year for all of the nonfarm industries. The nonresidential construction sector added 10,300 new jobs in the month after adding 4,900 in May, while the residential sector tallied 6,000 new jobs for the month.

U.S. MEWP Rental Fleet Posts Six Percent Gain

According to latest report from the International Powered Access Federation, the U.S. mobile elevating work platform rental market is exceeding expectations as the size of this country's rental fleet expanded by 6 percent to around 561,000 units - driven in large part by the strong growth of the construction industry and falling unemployment. The overall value of the U.S. MEWP rental market saw an 8 percent increase from 2015.

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July 17, 2019, 8:34 pm PDT

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