The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.
The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.
Postings are weekly.
What's the story behind Tennessee's strong construction employment data?
Among the interesting developments with regional employment data is Tennessee's mini-boom in construction employment. Well, it's not really a "boom," but when compared with other states in the region, it is clearly an outlier. The Volunteer State has added nearly 10,000 construction jobs over the past year while other states continue to post declines. The chart below shows total employment in the construction sector over the last 10 years, and we can clearly see the jump in Tennessee that begins in early 2011.
I asked David Penn, director of the Business & Economic Research Center at Middle Tennessee State University, about this development. Dr. Penn's center publishes detailed reports on Tennessee's employment picture, among them a sector-by-sector view of recent data. My question was a two-parter, the first asking if there was something odd going on with seasonal developments and whether the jump in Tennessee construction employment was actually picking up on an increase in energy extraction activity. (Tennessee construction data are not reported separately as in other states. Rather, it is part of a broader measure called "Construction, Mining, and Logging.")
Dr. Penn replied that there was some evidence of warmer winter weather playing a role in boosting some construction activity, but if seasonal factors were the driving factor, these same seasonal factors should have affected other states as well (and clearly did not). Furthermore, he said there was no large pick-up in mining activity that could have been captured in the broader measure of construction employment. The increase in the state's construction employment was real. He looked into more detailed employment data from the Quarterly Census of Employment and Wages (QCEW) series from the U.S. Bureau of Labor Statistics, which showed that:
"Within construction, roughly equal numbers of jobs have been created in building construction, heavy construction, and specialty trade contractors. Within these categories, nonresidential building is important (college campus construction, the Nashville convention center), as are utility construction and an 'other' category under heavy construction and building equipment contractors (electrical, plumbing, HVAC)."
Dr. Penn was also quoted in the Nashville Post, where he provided some context to the relative strength of the state's construction sector:
"The level of employment in this sector had dropped so low that it didn't take a major increase in jobs to show a large growth rate," he said. "The lion's share of this increase is driven by construction," Penn added. "We've seen double-digit increases in housing permits, especially in this area."
I checked the numbers, and there has indeed been a jump in the state's permits for new residential construction, although the latest data (February) did simmer down a bit (see the chart below). Commercial construction, as measured by new projects in terms of square feet, has also trended up.
We don't know yet whether or not the improving trend in Tennessee construction activity and employment will persist, but for this beleaguered sector, any improvement anywhere in the Southeast is good news.
By Mike Chriszt, a vice president in the Atlanta Fed's research department
TrackBack URL for this entry:
Listed below are links to blogs that reference What's the story behind Tennessee's strong construction employment data?:
- Southeast Manufacturing Slows in August
- It's Mostly Sunny in Florida
- Auto Manufacturing an Economic Boon for Tennessee
- Southeast Manufacturing Rebounded in June
- Southeast Manufacturing Dips in May
- Assessing the Impact of Oil Price Declines on Louisiana's Economy
- Seeking the Slack
- Middle Tennessee Consumer Confidence on the Rise
- Trials and Tribulations in Transportation
- Southeast Manufacturing: Solid as an Oak
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- Banks and banking
- Beige Book
- Business Cycles
- Commodity Prices
- Consumer Savings
- Data Releases
- Disaster recovery
- Economic conditions
- Economic Growth and Development
- Economic Indicators
- Fiscal Policy
- Gulf Coast
- Health Care
- Holiday Sales
- Labor Markets
- Local Economic Analysis and Research Network (LEARN)
- Monetary Policy
- Natural Disasters
- New Orleans
- Oil Spill
- Real Estate
- Sales Tax