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The latest construction spending and employment reports from the U.S. Census Bureau and Bureau of Labor Statistics provided good news for the glass and glazing industry.
Construction Spending
While overall nonresidential spending barely edged up in November and was down year-over-year, building sectors that use large amounts of glass performed well.
According to the Census Bureau’s report on value of construction put in place, the educational building sector had another strong month, with monthly and yearly spending increases of 3.2 and 8.3 percent, respectively. The office segment was also up in November, with a 4.6-percent increase, though that category saw a year-over-year decline of 4.8 percent.
Healthcare building ticked down 0.5 percent for the month but was up 9.5 percent from the same time last year, and lodging construction increased 0.7 percent and 3.4 percent for the month and the year, respectively. The other commercial segment, which includes retail, increased 1.2 percent from October 2017 and 7.9 percent from November 2016.
“The November report represented a stark reversal of preexisting trends,” Associated Builders and Contractors chief economist Anirban Basu said in his analysis. “For much of the past several years, the pattern in nonresidential construction spending has been one in which a number of private categories expanded briskly, including lodging and office, while a host of public construction categories experienced sluggish spending. That changed in November, with public construction spending rising and private construction spending shrinking on a year-over-year basis.”
Basu said that a possible explanation for this change could be “growing concerns about overbuilding in a number of large metropolitan areas in the lodging, office and commercial categories.” He added, “Financiers may also be less willing to supply financing to a variety of private projects given such concerns. At the same time, the U.S. housing market is the strongest it has been in at least a decade, raising sales prices and expanding assessable residential tax bases. That in turn has supplied additional resources for infrastructure. Over the past year, this has been particularly apparent in the educational and public safety categories.”
Industry Employment
In December, construction employment numbers related to the glass and glazing industry continued to trend in a positive direction. The nonresidential specialty trade contractors and nonresidential building categories—which include glaziers, iron workers and building exterior contractors—saw job increases by three of four measures.
Nonresidential specialty trade contractors increased employment by 0.6 percent from November and 3.3 percent from December 2016. Nonresidential building saw a slight 0.2-percent decline in jobs but increased employment at a 2.7-percent rate for the year.
The national construction industry as a whole saw a 3.1-percent increase in employment for the year, with both residential specialty trade contractors and residential building contractors also adding jobs on a monthly and yearly basis.
“Employment and pay in construction have risen more rapidly over the past year than in the economy overall, as the supply of unemployed, experienced workers continues to shrink,” Ken Simonson, the Associated General Contractors of America’s chief economist, said in his analysis. “Construction pay is now almost 10 percent higher than the private-sector average. Nevertheless, contractors report increasing difficulty filling many types of hourly craft and salaried openings, given the low rate of unemployment throughout the economy, including construction.”
The unemployment rate in construction dropped to 5.9 percent last month from 7.4 percent a year earlier. According to AGC, the rate and number of unemployed were the lowest for December in the 17-year history of the series.
