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Construction jobs rise for two straight months; spending is mixed; wages cool down.

The construction industry plays a powerful role in sustaining economic growth, in addition to producing structures that add to our productivity and quality of life.

With the worst recession in decades finally easing, the question many Americans are asking is what now? After prior recessions, many of the lost jobs came back quickly and people more or less resumed their former lives. But this time, economists think many of the 8.4 million jobs lost during the recession are gone for good, with a tumultuous period of adjustment ahead.
Nonfarm payroll employment in April jumped by 290,000, seasonally adjusted, but the unemployment rate also rose, to 9.9 percent, as rising job prospects drew more job-seekers, the Bureau of Labor Statistics reported on Friday [May 7]. Construction employment climbed for the second straight month, by 14,000 (0.2 percent), and the March increase was revised up to 26,000 from an initial estimate of 15,000. Despite the two-month rise, employment in April totaled only 5,625,000, down 554,000 (9.0 percent) from a year before and 2,100,000 (27 percent) from the peak in August 2006. In both months, the gains were limited to nonresidential categories, which added 24,600 jobs in April and 36,500 in March: nonresidential specialty contractors (6,200 and 15,500), nonresidential building (9,200 and 12,300), and heavy and civil engineering construction (9,200 and 8,700), according to a May 10 Data Digest report.

"As today's report makes clear, the impacts of the stimulus are now being felt across a much broader section of the construction industry," said Ken Simonson, the association's chief economist. "The good news is the stimulus is for now turning the tide on construction employment; the bad news is the stimulus is temporary while the construction downturn will be protracted."

Construction spending in March climbed 0.2% to a seasonally adjusted annual rate of $847 billion but remained 12% below the March 2009 level and 30% lower than the peak of March 2006, the Census Bureau reported on May 3.
Public construction rose 2.3% for the month but was 6.3% lower than a year ago. Of the two major public segments, highway and street construction rose 1.5% from February but fell 1.4% from March 2009, while public educational construction slumped 2.2% and 17%. The divergent results may reflect the impact of the 2009 Recovery Act (“stimulus”).
Highways received $27.5 billion, of which about $6 billion had been paid to contractors as of May 3, according to the Federal Highway Administration, while no funding was set aside for schools or colleges. Transportation facilities (transit, rail, ports and airports), which have received some stimulus funds, with more to come, soared 12% and 32%. Private
Nonresidential construction sank 0.7% and 26%, with year-over-year declines in every segment except power (-3.8% for the month, +0.6% over 12 months). The next-largest

House economics is recovering

segments were manufacturing, 5.2% and -28%; commercial (retail, warehouse and farm construction), -1.3% and -37%; health care, 3.0% and -16%; and office, -2.8% and -42%. Private
Residential construction fell 1.1% for the month but rose 1.2% year-over-year, the first 12-month gain since June 2006.
New single-family construction rose 2% for the month and 17% year-over-year; while new multifamily fell 6% and 58%and improvements to existing single- and multifamily fell 3% for the month but rose 7% compared to March 2009. “A significant number of domestic banks, on balance, continued to report having tightened” commercial real Estate (CRE) loan standards, the Federal Reserve reported on Tuesday in summarizing the latest quarterly survey of senior loan officers at 56 U.S. banks and 23 foreign bank branches or subsidiaries. “However, this net fraction was considerably smaller than in the January survey. As in the previous survey, domestic banks reported weaker demand for CRE loans, on net. However, in the latest survey, the net fraction of banks reporting weaker demand moved below 10% for the first time since the financial crisis began. In contrast, branches and agencies of foreign banks reported no change in CRE lending standards, on balance, and a small net fraction of these respondents experienced an increase in demand for CRE loans.”

. It's obvious that jobs remain scarce, and many economists think abnormally high unemployment will last for several years. What's different this time, compared with prior recessions, is that American workers now compete with cheap foreign labor, and new technology lets many companies produce more with a smaller payroll. Employers these days have a rich pool of talent to choose from when they do hire-which means workers need every edge they can get. Anybody expecting good pay for mediocre work will end up deeply disappointed. The winners will be those who hustle, do more than asked, and occasionally swallow their pride. But also there’s another factor in which the middle or average educated worker is the one who is suffering the most, whereas the less educated and less skilled and higher educated and skilled worker are the ones with a better prospect nowadays.

It’s believed that now it’s a good time for buying a home, since prices are record lows for residential dwellings. Many contest this stament. Only time and probably early next year we will know for sure where are we and where are we heading to.
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Buena Homes Builder - Jose Perez, Owner.
GENERAL CONTRACTOR

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The residential framing sector of the construction industry is a turbulent place to run a successful business unless you have the experience and savvy to stomach the ups and downs that are an inherent part of this area of the residential and commercial construction world.

Although interest rates and housing initiatives can have drastic impacts on this genre of the house framing industry, the companies in Ventura County that are able to keep the flow of house framing business and margins relatively steady are those builder whom will survive the down-turn and at the end will be the contractors with the most experience.

This will add benefits for the homeowner and the national construction economics in general, because this means that the framing contractor will be matured into a solid company that has the capacity to provide a more responsible residential construction quote based on facts and not by mere ideals.
Many times I had found renovation contractors beings sell "cheap" just to keep afloat, and this had caused many troubles to homeowners and to framing contractors.
When a remodeling or new home contractor sells "cheap", or if your "ideal is the lowest bidder is the best" it is well to add something for the risks you run, and if you do that, "you will have enough to pay for something better".
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BuenaHomes Construction is Located in Oxnard California. P.O. Box 7315
Oxnard,CA 93031 Phone: 805-844-3175
Email: BuenaHomes@Gmail.Com
Lic. 825805
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