new-construction-projects-on-the-riseNew construction starts rose for the second month in a row in April. The April construction outlook brings good news to a sector that suffered from a brutal winter with unusually tough conditions.

With the strong rise preceding the summer months, companies are confident that the new projects will make up for a remarkably slow start in 2014.

The April data doesn’t provide any type of conclusive forecast for the rest of the year, but the positive month is a good sign for the construction industry and if coupled with a positive May, gives reason for optimism heading into the summer months.

Robert A. Murrary, chief economist for Mcgraw Hill Construction summarized the April data with this evenhanded outlook.

“On the plus side, nonresidential building is strengthening once again, after slipping in recent months. The commercial and manufacturing categories are regaining momentum, while institutional building is making the transition to an up-and-down pattern after its steady decline over the past five years. Multifamily housing continues to move at a good clip.

On the down side, this year’s total construction volume is being restrained by a more subdued pace for public works, given the comparison to last year’s elevated amount and the uncertain prospects for getting new transportation legislation passed. Another cautionary note is related to single family housing, which through the first four months of 2014 had yet to move beyond the modest erosion that emerged towards the end of last year.”

The increased workload had a positive impact on job rates country wide as construction employment outlooks continued to brighten.

Overall, April jobless rate fell to 9.4% from March’s 11.3% and the workforce increased by roughly 32,000 jobs.

The regional outlook varied with some states experiencing larger growth, while some state’s like Minnesota had a disappointing month overall.

The drop in jobless rate to 9.4% was a welcome well though. According to the Bureau of Labor Statistics monthly employment report, which was released back on May 2, construction’s unemployment rate last month was much better than it was in April 2013 where it sat at a level of 13.2%.

The bureau’s report stated that April’s construction-jobs growth spanned all industry sectors, led by buildings construction, which gained 11,000.

In April new starts increased for nonresidential building and housing. Construction on public works, electric utilities, highway work, and bridge construction all fell.  

We’ll continue to monitor which type of construction projects are on the rise and which projects experience a dip in production.