U.S. construction drops in October

The familiar up-and-down "sawtooth" pattern that has characterized the fortunes of U.S. construction came to light once again in the latest Dodge Data and Analytics report.

The group reported on Nov. 21 that new construction starts in October dropped 9 percent to a seasonally adjusted annual rate of $742.9 billion, pulling back after a 14 percent jump in September.

Over the past two months the pattern for total construction starts was shaped by nonresidential building, which fell 30 percent in October after soaring 37 percent in September. 

For the first ten months of 2017, total construction starts on an unadjusted basis were $631.2 billion, up 1 percent from the same period a year ago.  The year-to-date gain for total construction was restrained by a 38 percent drop for the electric utility/gas plant category, Dodge said.

The 1 percent increase for total construction was due to mixed behavior by the three major construction sectors.  Nonresidential building increased 8 percent year-to-date, with institutional building up 18 percent while commercial building slipped 7 percent. Manufacturing building was up 31 percent so far in 2017, while residential building has grown 1 percent.

By region, the Midwest has fared the worst, with construction starts down 12 percent this year compared to the same period a year ago. 

While construction starts are down in the Midwest, employment in the region is holding its own. Michigan has fared a bit worse than average compared to its Midwestern neighbors in terms of construction employment, over the past 12 months, but it is still higher. According to the Associated General Contractors of America, Michigan gained 3,200 construction jobs between October 2016 and October 2017, a 2 percent increase. Our state now employs 173,300 Hardhats, the AGC says. 

First step taken for national RTW law

The first step toward the nation getting a right-to-work law for public employees took place on Nov. 29, when attorneys for Illinois public servant Mark Janus filed the first merits brief in the Supreme Court case, Janus v. AFSCME. The brief asks the Supreme Court to recognize that the First Amendment allows public workers to enjoy the benefits of union bargaining without having to pay union dues.

If the Supreme Court does as expected and rules in Janus’ favor, more than 5 million public school teachers, firefighters, police officers, and other government employees would be free to decide individually whether or not to make voluntary union payments. Oral arguments in the case are now expected to occur in late February.

With the Janus ruling, the 5-4 conservative advantage among justices on the Supreme Court is expected to supplant the 1977 Abood v. Detroit Board of Education case, which has guided the union dues policy for public employees. In that case, the Supremes ruled that public employees could not be required to subsidize many political and ideological union activities; however the court left in place the requirement that workers must pay dues to subsidize union bargaining.