Unemployment on the Rise
According to a U.S. Labor Department report,
62,000 jobs were lost in June, while the
unemployment rate reached 5.5%. 43,000 of
those jobs were construction related. This
is the six straight
month that jobs have decreased
accross the
nation.
New HomeStarts
Decline 3.3%
According to the U.S. Commerce Department
new-home starts declined 3.3 percent to a
seasonally adjusted annual rate of 975,000
units in May. This was the lowest total
starts number since March of 1991.
Single-family starts declined 1.0 percent to
a rate of 674,000 units, their lowest since
January of 1991.
New Construction Start in May Unchanged
According to McGraw-Hill Construction, a
division of The McGraw-Hill Companies, at a
seasonally adjusted annual rate of $557.8
billion, new construction starts in May were
essentially unchanged from April. During
the first five months of 2008, total
construction on an unadjusted basis was
reported at $228.3 billion, down 14% from
the same period a year ago. If residential
building is excluded from the year-to-date
comparison, new construction starts in the
first five months of 2008 increased 7%.
Value of New Florida Contracts Declined Over
40%
McGraw-Hill Construction recently reported
that the value of new Florida contracts
declined by 40% overall in the month of
April, when compared to the same period in
2007. The value of April contracts for
future construction totaled roughly $2.8
billion, compared to last April’s $4.6
billion total. Residential construction
fell by approximately
49%, while the
nonbuilding sector declined by 38%,
and the nonresidential fell sharply by 29%.
Architectural Billings Drop 15 Points
The Architectural billings Index (ABI),
compiled by the AIA, ended its first quarter
of 2008 at the lowest point in its 12-year
history with 39.5, which is a 15 point drop
from last December. The ABI in April
rebounded to 45.5 while the May figures came
in at 43.5.
New Home Sales Decline 2.5% in May
In the latest evidence of severe and ongoing
weakness in the nation’s housing market, the
Commerce Department recently reported that
sales of newly built, single-family homes
fell 2.5 percent in May to a seasonally
adjusted annual rate of 512,000 units,
largely offsetting a gain they recorded in
the previous month.
“The fact that new-home
sales are occurring at such a slow pace in
the middle of the home buying season, with
inventories only barely inching downward, is
a strong indication of just how critical it
is for Congress to move forward immediately
with housing stimulus legislation,” said
National Association of Home Builders (NAHB)
President Sandy Dunn, a home builder from
Point Pleasant, W.Va. Commerce’s report
indicated that the inventory of new homes
for sale fell 1.7 percent in May to 453,000
units, which is a 10.9-month supply at the
current sales pace.
FMI’s
Construction Outlook: Second Quarter 2008
Report Now Available
FMI, management consultants and investment
bankers to the building and construction
industry, announces the Construction
Outlook: The Second Quarter 2008 report is
now available.
The Construction Outlook, a
quarterly construction market forecast
developed by FMI’s
Research Services Group, notes that
FMI’s outlook
for construction for 2008 remains much the
same, but the outlook for 2009 has been
revised down slightly because a downturn in
nonresidential construction usually lags a
slow down in the general economy.
Recently released economic
indicators are somewhat mixed. Housing,
credit tightening, consumer spending and
inflation continue to hinder the economy.
While the general economy begins to
stabilize somewhat, nonresidential
construction is expected to falter late in
2008 and into 2009.
Total construction in 2008
and 2009 will be down 4% and 1% based upon
large decreases in residential construction
that will not be offset by gains in
nonresidential and
nonbuilding construction. The
decline in 2009 will be driven by a decrease
in nonresidential construction for the first
time since 2003.
