U.S. Jobs Growth Remains Solid in February, Despite Decline in Industrial Construction Starts

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Researched by Industrial Info Resources (Sugar Land, Texas)--Job growth in the United States has been on an upward swing for the last several months. Thanks to signs of overall improvement in the economy, industrial construction starts have remained solid as well. The expected dip in jobs growth following the holidays hiring binge has not yet appeared, which means that the news has been good for those seeking employment. In February, despite a decline in total industrial construction starts, 227,000 jobs were created.

The job numbers were in a very positive range, but were not quite enough to lower the unemployment rate in the country. Unemployment remained at 8.3% in the U.S., but given the trend in hiring that has been seen for the last several months, it could decline in the coming months. The private service-providing sectors provided the new jobs bump in February, accounting for just more than 200,000 of the jobs created.

Significant gains were seen in the professional and business services sector, which added 82,000 jobs, and the education and health services sector, which added 71,000 jobs. An additional 44,000 jobs were created in the leisure and hospitality sector. Of the goods-producing sectors, growth was seen in several key areas, but not at the levels seen in months past.

About 31,000 manufacturing jobs were created during the month. The fabricated metal products sector added 11,000 jobs and the transportation equipment sector added 8,000 jobs, while the machinery sector contributed 5,000 jobs and the furniture and related products sector added 3,000 jobs. The construction sector, which had grown for the last two months, declined by 13,000 jobs during February. The unemployment rate in the construction sector has remained very high thanks to the weak housing market.

Industrial construction starts declined by $4 billion in February, as only $10.8 billion in capital or maintenance projects began construction activities during the month. Once again, the Southwest region of the country saw the most activity during the month, with $3.4 billion in construction starts, while the Great Lakes region saw $2 billion in total construction starts and the Southeast region added $1.7 billion to the total.

The Alternative Fuels Industry saw the most spending for the month, with $2.6 billion in construction starts. The Power Industry saw the second-highest amount of construction begin during the month, with $1.7 billion while the Oil & Gas Production Industry added $1.5 billion in construction. The Oil & Gas Transmission and the Industrial Manufacturing industries also saw some significant spending, with $1.2 billion each for the month.

The early year slump in spending was not exactly unexpected. Traditionally, spending declines at the beginning of the year as winter weather hampers construction efforts. However, the winter has been extremely mild in 2012, and that has led to more industrial construction work beginning than what is typically seen. Looking ahead at what is planned for March, more than $20 billion worth of capital or maintenance projects are currently scheduled to begin construction, which would be a significant boost to overall spending, should all the projects reach the construction stage.

The employment situation should slowly continue to improve as the year progresses and as industrial construction starts ramp up during the spring and summer construction seasons. Given the mild winter, spending may be even more improved as the summer approaches, which is only good news for the unemployment situation in the U.S. While the housing market is not showing any signs of improvement, many of those construction jobs may get moved to industrial projects as the volume of those types of projects increases as the year progresses. Hopefully, the unemployment rate will continue its decline in the coming months as industrial spending increases.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.