The Carolinas construction industry experienced a third straight quarter of stability with optimistic expectations for the remainder of 2005, according to a “construction barometer” taken by the Carolinas chapter of the Associated General Contractors of America.
The Carolinas AGC barometer — a quarterly composite index for the Carolinas construction industry — currently shows a 2.93 on a scale from one to five. The barometer began to show an uptick for the industry in early 2004, with a 4 percent annual rate of growth.
The construction barometer results are good news for many Carolina contractors.
Regional growth for North Carolina was strongest in the central and western counties. South Carolina showed growth in both the upper and lower parts of the state.
Many Carolina contractors reported little change in labor costs, and held expectations of continued stability, according to the barometer. While contractors reported somewhat tighter labor markets, consistent with falling unemployment throughout the Carolinas, it appears increased labor availability from job losses in textiles, apparel and furniture manufacturing is sufficient to accommodate construction industry job growth throughout 2005.
Nationwide mass layoffs — those involving 50 or more workers from a single site — jumped in January, according the U.S. Bureau of Labor Statistics. Construction accounted for 18 percent of events and 13 percent of initial layoff claims filed in January 2005.
Most BLS-reported layoffs were in highway, street and bridge construction. Layoffs in the highway construction segment are common in winter and may have spiked if the weather was unusually bad.
The increased construction business reported by the Carolinas AGC chapter doesn’t seem to be placing additional upward pressure on equipment and materials costs — contractors report virtually no change in equipment costs, and only isolated materials cost increases.
Carolina contractors reported increased plans to acquire new heavy equipment during the first half of 2005.
Information from the construction barometer is based on quantitative information – economic data and regional business statistics – plus qualitative information, such as subjective information from a panel of industry experts. It includes about 24,800 pieces of data.
One hundred industry CEOs and top managers from North Carolina and South Carolina constitute the panel for the qualitative part of the index. Eighty percent of the panel is made up of Carolinas AGC contractors; 20 percent includes allied firms such as suppliers, architects, bonding/insurance agents and accountants.
Patrick Beeson can be contacted at [email protected].
