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Construction Spending Increases by 4.3% Nationwide in 2011

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Construction employment increased in 148 out of 337 metropolitan areas between December 2010 and December 2011, decreased in 128 and stayed level in 61, according to a new analysis of federal employment data recently released by the Associated General Contractors of America.

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The construction employment increases were likely fueled by a 4.3% increase in total construction spending between December 2010 and December 2011, driven largely by growing private-sector demand, association officials noted.

“Many communities are benefitting from growing demand from the private sector for new construction activity,” said Ken Simonson, the association’s chief economist. “Unfortunately, too many other areas are still coping with construction employment losses as the overall market remains relatively weak.”

Lake County-Kenosha County, Ill.-Wis., added both the most and the highest percentage of new construction jobs (33%, 3,900 jobs). Other areas adding a large number of jobs included Edison-New Brunswick, N.J. (3,700 jobs, 11%); Portland-Vancouver-Hillsboro, Ore.-Wash. (3,600 jobs, 8%); Louisville-Jefferson County, Ky.-Ind. (3,100 jobs, 13%) and San Jose-Sunnyvale-Santa Clara, Calif. (3,100 jobs, 10%).

The largest job losses were in Philadelphia, Pa. (-4,800 jobs, -7%), followed by New York City (-4,600 jobs, -4%); Dallas-Plano-Irving, Texas (-4,500 jobs, -4%) and St. Louis, Mo. (-4,300 jobs, -7%). The Logan, Utah-Idaho area (-23%, -700 jobs) lost the highest percentage. Other areas experiencing large percentage declines in construction employment included Wilmington, N.C. (-20%, -1,800 jobs); Montgomery, Ala. (-17%, -1,100 jobs) and Bridgeport-Stamford-Norwalk, Conn. (-14%, -1,500 jobs).

Simonson noted that total annualized construction spending rate increased from $782.9 billion in December 2010 to $816.4 billion in December 2011, a 4.3% annual increase and a 1.5% jump from November 2011. However, for the full year, construction spending fell 2% from the 2010 total. The increases were largely driven by growth in private-sector demand, the economist said, noting that spending on private nonresidential construction activity increased by 2.4% compared to 2010, while residential construction slipped 1.1% and public construction declined 6.5%.

Association officials said that recent developments in Washington that could lead to passage of long-delayed highway, bridge, transit and aviation investment legislation could give a needed boost to construction employment in many areas.

“Construction employment should increase once Congress finally acts on long-overdue infrastructure measures,” said the association’s chief executive officer, Stephen E. Sandherr. “After all Washington should be taking measures to help this industry recover, instead of holding it back.”

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