Dodge Momentum Index Rises for Fifth Straight Month in August and Non-Residential Starts Increase

The Dodge Momentum Index increased by 1.3% in August, marking the fifth consecutive month in which the index grew.[1]  The Index measures non-residential construction projects entering the planning stages and generally serves as an indicator of construction spending one year in the future.  At the end of August, the Index was 16% above where it was one year ago.

Dodge Data & Analytics also reported that total construction starts experienced a strong 21% increase in August.[2]  Dodge’s chief economist concludes “the construction industry still has room for further expansion despite some recent deceleration.”  The rise in construction starts was lead by non-residential building construction with a 42% increase, followed by non-building construction with a 25% increase.  Residential construction starts registered a smaller 5% increase.

 

Construction’s Impact on South Carolina, North Carolina, and Georgia’s Economies

The Associated General Contractors recently released data on the economic impact of and growth in construction in South Carolina,[3] North Carolina,[4] and Georgia.[5]  Some of the key findings:

South Carolina

  • In South Carolina, construction contributes 4.5% of the State’s GDP which is higher than construction’s 4% share of the national GDP.
  • South Carolina’s construction employment increased by 6.3% from July 2015 to July 2016 which exceeds the national average of 3.2%.
  • From July 2015 to July 2016, the metropolitan areas experiencing the greatest increase in construction employment were Charleston (5%), followed by Columbia (4%), Greenville (4%), and Myrtle Beach (4%).

North Carolina

  • In North Carolina, construction contributes 3.5% of the State’s GDP which is less than construction’s 4% share of the national GDP.
  • North Carolina’s construction employment increased by 4.4% from July 2015 to July 2016 which exceeds the national average of 3.2%.
  • From July 2015 to July 2016, the metropolitan areas experiencing the greatest increase in construction employment were Charlotte (7%), Durham-Chapel Hill (5%), and Greensboro (4%), while Raleigh experienced a decrease in construction employment (-2%).

Georgia

  • In Georgia, construction contributes 3.7% of the State’s GDP, less than construction’s 4% share of the national GDP.
  • Construction employment in Georgia increased by 7.5% from July 2015 to July 2016, far exceeding the national average of 3.2%.
  • The metropolitan area most responsible for the increased construction employment and experiencing the greatest increase was, not surprisingly, the Atlanta metro area (7%). The Augusta and Savannah metro areas each experienced only a 2% employment growth and Columbus experienced a 2% decrease in construction employment.

 

Labor Shortages and Record Job Openings

The AGC also released a report at the end of September showing construction employment continues to grow across the United States but the rate of growth slowed. [6]  The report attributes the slowed growth to the skilled labor shortage, not to any decline in the volume of work available.  The report states “the new construction employment figures, combined with recent data on job openings in the sector, make it clear that firms in many parts of the country are having a hard time finding enough workers to hire” and finds that job openings have hit a ten year high.

[1] Dodge Data & Analytics, Dodge Momentum Index Continues Ascent in August, available at: http://construction.com/about-us/press/Dodge-Momentum-Index-Continues-Ascent-in-August.asp.

[2] Dodge Data & Analytics, August Construction Starts Jump 21 Percent, available at: http://construction.com/about-us/press/August-Construction-Starts-Jump-21-Percent.asp.

[3] The Associated General Contractors of America, The Economic Impact of Construction in the United States and South Carolina, available at: http://files.agc.org/files/economic_state_facts/SCstim.pdf.

[4] The Associated General Contractors of America, The Economic Impact of Construction in the United States and North Carolina, available at: http://files.agc.org/files/economic_state_facts/NCstim.pdf.

[5] The Associated General Contractors of America, The Economic Impact of Construction in the United States and Georgia, available at:  http://files.agc.org/files/economic_state_facts/GAstim.pdf.

[6] The Associated General Contractors of America, Construction Employment Increases in Three-Fifths of Nation’s Metro Areas Between August 2015 and August 2016 As Industry Job Openings Hit 10-Year High, available at: https://www.agc.org/news/2016/09/28/construction-employment-increases-three-fifths-nation%E2%80%99s-metro-areas-between-august.