The December 84,000 job loss figure recently released by the Bureau of Labor Statistics (BLS) was expected, but a three-month data review suggests that labor conditions are improving at a pace better than expected. According to a recent report by the Portland Cement Association (PCA), Skokie, Ill., the combination of BLS upward data revisions and better-than-expected job market performance resulted in only 501,000 job losses from August to December, versus a 861,000 job loss predicted by PCA.
"There is evidence that the job-creation process has already begun,” says Ed Sullivan, PCA chief economist. "Typically, extended work hours, overtime, and temporary hiring precede job creation. November’s increase in the length of the average workweek — the first increase in 14 months — was unchanged in December at 33.2 hours. Furthermore, temporary employment continued to rise as 47,000 positions were added in December."
If the labor market sustains its better-than-expected performance from the fourth quarter, it could lead to a quicker healing of the underlying fundamentals surrounding construction, Sullivan says.
"Slightly stronger labor market projections could reduce 2010 state deficits resulting in smaller drags on public construction activity and lead to the potential of a quicker recovery in nonresidential construction," Sullivan explains. "Additionally, a stronger labor market would improve the outlook for single-family construction activity in 2010 and 2011 and shorten the period for an easing in lending standards."