Nonresidential construction still expanding
According to Patrick Newport, a U.S. Economist with Global Insight, commercial construction numbers continue to look good.
According to Patrick Newport, a U.S. Economist with Global Insight , commercial construction numbers continue to look good.
* Construction spending fell 1.1% in March.
* A big drop in residential improvements (an unreliable estimate) distorted the top-line number.
Excluding improvements, spending fell 0.4%.
* Private construction declined 1.7%, while public construction increased 0.6%.
* Single-family home construction dropped by more than 5% for the fourth time in five months.
* Private nonresidential construction increased 1.9%. Moreover, its recent history was revised up.
* Based on these estimates, second quarter GDP will be revised up by $10.1 billion later this month.
For at least three reasons, this report was not as bad as the headline number implies.
First, residential improvements accounted for most of the drop. This category does not appear in the published tables because it does not meet the Census Bureau's quality standards. (One can back out an estimate of this volatile and unreliable category, however, by subtraction.) Indeed, March's improvements estimate, according to the Census documentation, is a forecast, not a data point based on sampled data. Excluding residential improvements, spending decreased 0.4%
Second, the condition of the nonresidential construction market is not as weak as portrayed in last month's release. Spending on nonresidential construction increased 1.9% in March. Moreover, the estimates for January and February were revised up. February's release implied that the nonresidential construction sector was slipping into recession. March's numbers indicate that it is expanding.
Third, the construction market is not as weak as portrayed in February's release, or as weak as the BEA portrayed it in the first quarter GDP estimates released yesterday (April 30). Based on March's construction numbers, second quarter GDP will be revised up by $10.1 billion later this month. This translates into nearly a 0.3% upward revision in real GDP.
Case Study Database
Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.
These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.
Click here to visit the Case Study Database and upload your case study.
2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.