MARKET NEWS Growing Confidence
Years with presidential elections are always full of uncertainty, and business owners generally act cautiously. This year the uncertainty appeared more pronounced, compounded by the looming tax rates and budget cuts that have become known as the “Fiscal Cliff.” While housing starts seem to be a brightening arena, it is still tenuous and
that is refl ected in the construction employment numbers. Still, there are posi- tive signs for the industry as it begins to dig out from a deep hole.
Value of Construction Put in Place in the United States, Seasonally Adjusted Annual Rate (Millions of dollars. Details may not add to totals due to rounding.)
Housing Starts Start with Multifamily The charts on single-family and multifamily starts show the steep decline in the new home market that was a key drag on the overall economy with housing in general. Pegged at about 15 percent of the Gross Do- mestic Product, the housing market can be a determin- ing factor for investment in other segments and a strong infl uence on con- sumer sentiment. The growth in multi-
family building is indicative of a housing recovery, which tends to come through multifamily fi rst, but it is more indicative of a demographic trend as the Echo Boomers enter the rental market, increasing demand for rental space. (Source: National Association of Home Builders)
Employment Takes a Hit After Sandy
pPreliminary rRevised 1Includes the following categories of private construction not shown separately: public safety, highway and street, sewage and waste disposal, water supply, and conservation and development.
2Includes the following categories of public construction not shown separately: lodging, religious, communication, and manufacturing.
Total construction is up 7.8 percent from September 2011 to September 2012, with strong private construction increases offsetting declines in public sec- tor construction. Most of those declines came in the offi ce and commercial segments. Showing a relatively strong bounce has been the increase in private residential construction, refl ecting the recent growth in the housing market. (Source: U.S. Census Bureau)
ABI Shows Increased Confi dence The American Institute of Architects produces the Architectural Billing Index on a monthly basis. It is a leading indicator that refl ects the work on the books within architectural fi rms and can be predictive of future construction work. An index number above 50 shows a positive assessment of the market,
while a number below 50 shows a negative assessment. After a spate of strongly negative sentiment earlier in the year, the ABI has refl ected a strong come back, indicating a strengthening construction market. (Source: American Institute of Architects)
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Construction companies are, understandably, reluctant to hire given the tenu- ous nature of the economic recovery. Thwarting recent increases was the devastation caused by Tropical Storm Sandy, which shut down millions of work- ers in the Northeast for a period of a couple of weeks. The bounce back from that impact should be quick, though, as well as have long-term consequences for construction employment as the region begins to rebuild. (Source: Bureau of Labor Statistics)
January 2013 METAL CONSTRUCTION NEWS 9
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