U.S. Jobs Numbers Edge Up as Industrial Construction Starts Remain Strong in April

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Researched by Industrial Info Resources (Sugar Land, Texas)--The jobs numbers in the U.S. have remained relatively flat through the first four months of 2013. The year began with some promise, and a significant spike in February gave hope to a significant boost in employment, but March's numbers were dismal. The overall unemployment rate has continued to decline, but not as rapidly as the government would like. April saw another 165,000 jobs created, and the unemployment rate dropped to 7.5% on the strength of another solid month for industrial construction starts.

Click on the image at right for a graph detailing construction starts by industry for April 2013.

The unemployment rate has declined 0.4% this year thus far, but that decline has not been backed up by major hiring boosts. February saw the most job growth for the year with more than 330,000 jobs created, but the hiring waned in the following months. While positive jobs numbers are always a good thing, the growth in 2013 has not been the kind that builds confidence. About 11.7 million workers remain unemployed in the U.S., which does not include the 2.3 million who are considered marginally attached to the labor force because they actively sought employment in the four weeks prior to the April numbers being released. Another 7.9 million involuntary part-time workers cloud the overall picture even more.

The construction sector saw its employment drop by 6,000 in April after posting gains in previous months. The key manufacturing sector remained stagnant with zero jobs added for the month, which does not bode well for the coming summer months. The bulk of the jobs added in April came from the private service-providing sectors, which saw 185,000 jobs created. Almost 30,000 of these jobs were in the retail trades, while the professional and business services sectors added 73,000 jobs. The leisure and hospitality sector saw the largest gain, creating 43,000 jobs during the month thanks to a boom in jobs at food service and drinking businesses. Governmental employment continued to decline, losing 11,000 jobs in April.

Industrial construction starts remained a bright spot in April, with $16.6 billion worth of capital and maintenance projects beginning construction activities in the U.S. The Southwest region of the country again saw the highest concentration of activity, with 169 projects worth an estimated $3.7 billion beginning construction. Three other regions topped the $2.3 billion mark in monthly spending: the Great Lakes region, the Midwest region and the Rocky Mountains region, while the Northeast and West Coast regions each contributed more than $1.5 billion.

The Power Industry, typically a major spender, continued to reign supreme in April with $4 billion in capital and maintenance projects beginning construction activities. The Oil & Gas Transmission and Metals & Minerals industries each saw construction starts go over the $2.1 billion mark, while four other industries exceeded $1.2 billion in total construction starts: the Oil & Gas Production, Chemical Processing, Food & Beverage and Pharmaceutical & Biotech industries. The largest number of projects occurred in the Oil & Gas Terminals Industry, which saw 158 projects worth an estimated $831 million begin construction.

Spending is likely to remain strong as the country enters the important summer months. Typically, the largest amount of construction work scheduled during any given year begins during these months, as the weather is more accommodating. However, the late spring snow falls and rain that much of the country is currently experiencing may slow down those construction efforts. Regardless, 2013 has begun strong in terms of spending on construction starts, but has remained relatively weak when it comes to hiring. This scenario is likely to continue through the summer, as companies discovered during the recession that they are capable of maintaining the necessary levels of production to meet demand without significantly increasing their respective payrolls. While this will certainly mean a slower decrease in the national unemployment rate, this may be the way of the future in the U.S., and the country is going to have to get used to this type of hiring for the foreseeable future.

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.