Regional Patterns Emerging in Construction

Federal Reserve Board monitors economic conditions for each of its 12 districts. Its report from early June was that nonresidential markets were beginning to show some improvement, in contrast to the still-stalled residential sector.

As the construction markets begin to recover, some areas of the country are performing better than others, according to Kermit Baker, AIA Chief Economist. Though national construction employment is at almost exactly the same level as a year ago, 23 states have reported increases in construction payrolls over this period. Somewhat surprisingly, Michigan leads the pack with a 5.2 percent increase in construction payrolls over the past 12 months.

Seven other states-Hawaii, Texas, Tennessee, Oklahoma, Kansas, North Dakota, and Illinois-and the District of Columbia have seen gains of 3 percent or more. At the other end of the spectrum, Nevada and Rhode Island have each lost 10 percent or more of their construction payrolls over the past year, with Georgia not far behind.

According to Federal Reserve Board report, nonresidential real estate leasing markets have been generally stable, while construction activity has remained very subdued. Loan demand was steady to stronger in most districts, especially in the commercial and industrial sector, and widespread improvement was reported in credit quality.

- Courtesy of AIA