Nov 7 2006 11:14AM | Permalink | Email this | Comments (0) |
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Contractors worked 1.4% more hours on job sites in October than in August or September even though they cut 26,000 jobs. It is too soon to be certain if this means that the summer slump in construction activity is over. We have to wait to see if the boost in hours survives the revisions made in the next employment report on December 8th. Construction labor data is always revised slightly every month. The reported boost in hours worked may turn out to be a measurement error or a problem with seasonal adjustment. Recall that lots of work time was lost last October during the hurricanes.

If the October estimates hold, this is an unusually large month to month change in construction activity. Improvements of this size have occurred about every six months over the last decade. Half of them have been reversed in the following month, suggesting they arose from unusual weather or initial measurement or seasonal adjustment errors. But the other half were not reversed. They were real changes in the level of construction activity.

If the October gain in hours worked turns out to be real it most likely signals a pick up in the construction of nonresidential buildings because these contractors and their subcontractors had the largest increase in both employees and average workweek last month.