Nonresidential construction jumped nearly 5% in November as construction unemployment rates fell in 38 states across the nation, including Arkansas, according to Associated Builders and Contractors. Nationwide, nonresidential spending rose to $712.4 billion in November, representing the highest level of spending in eight years.
In Northwest Arkansas, the spending has reached its highest level since 2007, said Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas. Through the first half of 2016, the value of permits that have been issued increased 174.6% to $206.5 million, from $75.2 million in the first half of 2015. A large part of the increase was related to the Arkansas Children’s project to build a pediatric hospital west of Interstate 49 in Springdale. Data for the second half of 2016 has yet to be compiled.
However, commercial permit value through the first 11 months of 2016 has risen 8.6% to $489.81 million, from $450.88 million in 2015. In November, the value of building permits that were issued fell 24% to $43.99 million, from $57.92 million in November 2015.
“Many construction firms have reported that they remain busy but have become concerned that work could dry up in certain markets in 2017 and 2018,” ABC chief economist Anirban Basu said in a news release. “This has been due to a combination of factors, including evidence of overbuilding in segments such as lodging and office buildings.”
Across the nation, the construction unemployment rate fell to the lowest level on record, matching the 5.7% rate in November 2005 and November 2000.
In Arkansas, the unemployment rate fell to 7.4% in November, from 8.8% in the same month in 2015. Arkansas has the eighth highest construction unemployment rate in the nation. In Northwest Arkansas, construction employment grew 3% in November, compared to the same month in 2015, and is the third fastest growing sector in the region, Deck said.
“The continued decline on a year-over-year basis in the unemployment rate nationally and in the majority of state rates is an indication of the health of the construction job market and its recovery from the deep recession it experienced,” said Bernard M. Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “The demand for skilled construction workers remains especially strong leading into 2017.”