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Ala. Construction Strong Despite Housing Slowdown

Wed June 20, 2007 - Southeast Edition
Construction Equipment Guide

Employment in Alabama and the Birmingham metropolitan area is growing at twice the rate of other non-farming jobs nationally, said Ken Simonson, the national AGC’s chief economist.

Simonson spoke to the Birmingham Section and the Statewide Associate Board at a special meeting May 10 at the Alabama AGC Headquarters in Irondale.

“Birmingham’s construction industry remains strong, despite a slowdown in the housing market,” he said.

However, the construction industry remains vulnerable to two factors — declining sales in the housing industry and construction materials costs that have started climbing again after falling in late 2006.

“Birmingham should do well … with all of the activity in the hospitals and Alabama is benefiting from the auto plants and the suppliers coming here,” Simonson said. “And your area continues to get great news like the fact that U.S. Pipe is expanding.”

The economist said that construction employed 113,000 workers in March 2007 statewide and 35,100 in the Birmingham-Hoover metro area, the highest March totals ever and up 3 percent from March 2006.

Simonson offered some other interesting economic facts:

• Value added by construction (labor plus profit-type income) contributed $7 billion to Alabama’s gross domestic product of $152 billion.

• Annual pay in 2005 in construction averaged $35,000 as compared to the average private sector average of $34,000.

• Small business is big in construction. Alabama had 9,600 construction establishments in 2004, of which 88 percent employed fewer than 20 workers. In addition, Alabama had 39,000 construction firms without employees, mainly sole proprietorships, in 2004.

• Alabama’s population grew 1.1 percent from July 2005 to July 2006, 18th fastest of all states and slightly faster than the 1 percent national growth rate. Birmingham-Hoover also grew 1.1 percent.

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