Construction activity, employment fall in 97% of US cities

21 February 2012 19:35  [Source: ICIS news]

WASHINGTON (ICIS)--Construction activity and related employment have fallen in more than 97% of US metropolitan areas, a contractors’ group said on Tuesday, and federal data show that non-residential spending for 2011 fell below 2010.

The Association of General Contractors (AGC) said construction employment remains below peak levels in 329 of the nation’s 337 metropolitan areas, evidence of continuing weakness in the construction industry.

Only six metropolitan areas across the country are enjoying above-peak construction employment, the association said, and those were chiefly in energy-producing states such as North Dakota, Oklahoma, Texas and Louisiana.

The AGC report on construction employment followed data from the US Department of Commerce (DOC) showing that non-residential construction spending by government entities fell by 6.5% in 2011 from the previous year.

Overall construction spending had fallen to a ten-year low in mid-2010.

Government-funded construction projects include building and repair of schools, water and sewage systems, highways, streets and bridges, commuter rail and power generation, among others.

Spending by governments at all levels on education-related construction fell by 5.3% in 2011 from 2010, the department said, and highway construction spending was down by 4.5% in 2011 from the prior year.

Public construction in 2011 totalled $283.3bn (€215.3bn), down from the 2010 total of $303bn, the department said.

Construction work is a major downstream consuming sector for chemicals, generating at least $160 in demand for chemical and resin products for every $1,000 spent on public building projects or highways, according to the American Chemistry Council (ACC).

The decline in government-funded construction paralleled the ongoing recession in the US private-sector housing industry, although the downturn in state-level spending on new structures was more severe.

While government-funded non-residential spending fell by 6.5% in 2011 from the prior year, the department said that private-sector new residential construction outlays fell by 1.7% in 2011 from 2010.

State government spending on public works projects has suffered since the onset of the 2008-2009 recession and has yet to recover.

($1 = €0.76)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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