Steep monthly declines in public and private nonresidential construction spending offset a surge in homebuilding in July, while industry employment decreased compared to July 2019 levels in two-thirds of the nation’s metro areas, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said many commercial construction firms were likely to continue shedding jobs without needed federal coronavirus relief measures.
“The dichotomy between slumping nonresidential projects—both public and private—and robust homebuilding seems sure to widen as the pandemic continues to devastate state and local finances and much of the private sector,” said Ken Simonson, the association’s chief economist. “Without new federal investments in infrastructure and other measures to boost demand for nonresidential construction, contractors will be forced to let more workers go.”
Construction spending in July totaled $1.36 trillion at a seasonally adjusted annual rate, a gain of 0.1% from June. A 1.2% drop in nonresidential spending nearly canceled out a 2.1% jump in residential spending, which was boosted by growth in both single-family (3.1%) and multifamily construction (4.9%).
Public construction spending decreased by 1.3%, dragged down by a 3.1% drop in highway and street construction spending and a 3.0% decline in educational construction spending, the two largest public segments. The next-largest segment, transportation facilities, also contracted, by 1.6 percent.
Private nonresidential construction spending slid 1.0% from June to July. The largest segment, power construction, dipped 0.1%. Among other large private spending categories, commercial construction—comprising retail, warehouse and farm structures—slumped 3.2%, while manufacturing construction rose 0.2% and office construction fell 0.7%.
Construction employment declined from July 2019 to July 2020 in 238, or 66%, out of 358 metro areas, increased in 90 areas (25%) and held steady in 30. New York City lost the most construction jobs (-26,500, -16%), while the steepest percentage loss occurred in Brockton-Bridgewater-Easton, Mass. (-36%, -2,100 jobs). Baltimore-Columbia-Towson, Md. added the most construction jobs over the year (4,800, 6%), while Walla Walla, Wash. had the largest percentage gain (25%, 300 jobs).
Association officials said that in addition to the new spending and metro employment data, the association is releasing the results of its annual workforce survey tomorrow that will underscore the need for new federal recovery measures. The construction officials called on Congress and the Trump administration to enact new infrastructure investments, pass a one-year extension to the current surface transportation law with additional transportation construction funding and enact liability reforms to shied firms that are protecting workers from the coronavirus from needless lawsuits.
“Without new federal relief measures, the industry’s limited recovery will likely be short lived,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress and the President should be taking advantage of current market conditions to rebuild our infrastructure, restore lost jobs and reinvigorate the economy.”
View the metro employment data, rankings, highs and lows, and top 10.
Related Stories
Market Data | Jul 21, 2020
Nonresidential building spending to decline through 2021
The commercial building sector is expected to be the hardest hit.
Market Data | Jul 21, 2020
7 must reads for the AEC industry today: July 21, 2020
Abandoned high-rise becomes mixed-use luxury apartments and researchers are developing anti-coronavirus tech for buildings.
Market Data | Jul 20, 2020
Construction employment rises from May to June in 31 states, slips in 18
Recent data from Procore on jobsite workers’ hours indicates employment may have leveled off.
Market Data | Jul 20, 2020
6 must reads for the AEC industry today: July 20, 2020
Never waste a crisis and robotic parking systems help developers optimize parking amenities.
Market Data | Jul 17, 2020
7 must reads for the AEC industry today: July 17, 2020
Kennedy Middle School's new Administration/Family Center and Tips to make optimal use of salvaged materials.
Market Data | Jul 16, 2020
Final NEPA rule will make it easier to rebuild infrastructure, reinvigorate the economy, and continue protecting the environment
Administration’s final reforms to the federal environmental review process fix problems with prior process, maintain environmental rigor, and accelerate needed infrastructure improvements.
Market Data | Jul 16, 2020
5 must reads for the AEC industry today: July 16, 2020
1928 hotel reimagined as a new resiential and cultural hub and Walgreens plans hundreds of doctor's offices at its stores.
Market Data | Jul 10, 2020
5 must reads for the AEC industry today: July 10, 2020
The world's tallest hybrid timber tower and the Florida Gators have a new $65 million ballpark.
Market Data | Jul 9, 2020
6 must reads for the AEC industry today: July 9, 2020
The world's most sustainable furniture factory and what will construction look like when COVID-19 ends?
Market Data | Jul 8, 2020
North America’s construction output to fall by 6.5% in 2020, says GlobalData
Even though all construction activities have been allowed to continue in most parts of the US and Canada since the start of the COVID-19 pandemic, many projects in the bidding or final planning stages have been delayed or canceled.
