The construction industry received some good news to close out 2015 and could continue the momentum going further into 2016.
Construction employment increased in 39 states for the months of November and December 2015, according to The Associated General Contractors of America. Forty-four states added construction jobs for 2015, the organization noted.
However, according to Stephen E. Sandherr, the association’s CEO, the energy sector remains a concern.
“Construction employment expanded in most parts of the country last year as demand for new projects rebounded,” Sandherr said in a statement. “The question now is whether declining energy prices will impact construction employment in a larger part of the country this year.”
“California added the most construction jobs in 2015.”
Between December 2014 and December 2015, California added the most construction jobs with 59,300. Other states with significant additions to construction payrolls include Florida (28,500), New York (26,500) and Colorado (11,700).
However, there were a few states that shed construction jobs, including West Virginia, Rhode Island, Wyoming and North Dakota, the association noted.
Job Market, Consumer Confidence Improve
A continually improving economy and job market could help the construction industry continue its gains going further into 2016.
According to the U.S. Department of Labor, jobless claims fell for the week ending January 23 by a seasonally adjusted 16,000 to 278,000. The Labor Department also indicated that the four-week average of initial claims fell to 283,000. With the labor market continuing to show signs it is strengthening, it may have a positive effect on the construction market, particularly the home construction market.
With more people finding steady work, they may be more willing to invest in building a new home. That, coupled with a housing inventory that cannot keep up with demand, indicates the construction industry may indeed see more new-home construction come spring and summer.
Another economic indicator that could bode well for the construction industry is consumer confidence.
MarketWatch reported that despite a fluctuating stock market, consumer confidence rose to 98.1, up from 96.3 in December. MarketWatch reported that it was the best reading since October.
Confidence rose despite recent market volatility. Declining energy prices and a Chinese economy that continues to struggle have been factors contributing to that volatility. But consumers seem undeterred.
“For now, consumers do not foresee the volatility in financial markets as having a negative impact on the economy,” Lynn Franco, director of economic indicators at The Conference Board said.
“A resilient labor market and low gasoline and utilities prices seem to have offset any negative sentiment stemming from the financial markets,” Derek Lindsey of BNP Paribas said, according to MarketWatch.
However, others are being more cautious about how the market affects consumer confidence. Ian Shepherdson, chief economist of Pantheon Macroeconomics, said there is sometimes a lag between market troubles and a reflection in consumer confidence, MarketWatch reported.
Shepherdson said people might wait to see how the market troubles affect their investments or retirement accounts before consumers react.
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