Trends in construction materials industries: data from the 1992 census of manufacturers – Bureau of the Census statistics on U.S. manufacturing industries
C.B. Pitcher
Every 5 years the Bureau of the Census releases detailed statistics on U.S. manufacturing industries. The 1992 data was released during the spring and summer of 1995. Over the years as this data has been made available, we have prepared a summary article on the data for major U.S. industries supplying the construction sector with materials.
The last article, covering the 1987 Census, appeared in the September/October 1991 issue of Construction Review. This article provides in addition to the data tables, a basic analysis of the trends for the covered industries, comparing 1992 with 1987 and for a few tables also with 1982. The analysis and data cover 42 4-digit Standard Industrial Classification (SIC) industries selected because most or at least a major proportion of that industry’s output goes into construction. There are about another 50 industries which also supply products to the construction sector, but where construction is a lesser percentage of their total market. Of course, there are even more of the total 460 SIC industries that do not make actual construction materials, but where construction activity is a important determinant in their market (furniture, draperies, many household appliances, some hardware items, some security items, etc). Note that construction tools and equipment are not included in this analysis.
A less detailed data series on U.S. industry is available from the Annual Survey of Manufactures, covering the years between the Census of Manufactures. The 1993 Survey is expected to be released later in 1995.
Analysis of the 1992 Census of Manufactures for construction materials, as shown in the following data tables, should take the following factors into consideration:
(1) Relative real construction activity levels in these years need to be assessed as current dollar data includes inflation (see Table 1). Also markets for specific building materials usually do not depend on the levels of total construction activity, but on a particular type or types of construction work such a residential, commercial, utility, public works in general, highway, etc. To assist in analyzing the relative strength or weakness of construction for these years, Table 1 provides constant dollar levels of total construction, levels of major types of construction, as well as housing starts, mobile home shipments, and current dollar expenditures for residential alterations, repairs, and additions. The quarterly Construction Review tables provide even more detail on construction and its components.
[TABULAR DATA 1 OMITTED]As shown in Table 1, total construction activity in real terms (constant dollars) was about 6.5 percent higher in 1987 than it was in 1992. Construction of residential buildings was down 14 percent between those years and private nonresidential buildings was down 23 percent. At the same time, however, total public construction and the important highway and bridge segment were up significantly.
(2) Foreign trade in these materials must also be considered. Several industries export a significant product volume. These include air conditioning, flat glass, builders’ hardware, some wood products, and fabricated structural metals. On the other hand, industries which experience sizable import competition include ceramic tile, cement, dimension stone, some plumbing equipment, builders’ hardware, flat glass, and fabricated structural metals. It should be noted that three products are on both the export and import list (fabricated structural metals, builders’ hardware, and flat glass) and that builders’ hardware is not included in this analysis as it is not a 4-digit industry but a 5-digit product group.
U.S. exports of wood building products in 1992 were 71 percent higher than in 1987 in current dollars. Total exports for the non-wood category (which excludes paints and electrical) were up 187 percent and those for air conditioning and heating equipment about doubled. U.S. imports of wood products rose 19 percent from 1987 to 1992, those for non-wood products rose 7 percent, and those for heating and air conditioning changed little. Details of these U.S. foreign trade data trends appeared in the Spring 1995 issue of Construction Review and trade data for a few selected products are included in Table F-3 of each issue of Construction Review.
(3) The Census industry and product data appearing in this article are in current dollars, not constant dollars. Therefore, trends in dollar values for the data shown in table 3 through 7 are not adjusted to compensate for price changes. During these years, some products recorded significant price increases in specific years while others actually had price declines.
Table 2 shows that the Bureau of Labor Statistics Producer Price Index for all construction materials rose a total of about 12 percent between 1987 and 1992. Specific products price changes, based on data from the same Bureau of Labor Statistics data, are shown in the “E” tables in each issue of Construction Review.
[TABULAR DATA 2 OMITTED]ANALYSIS OF BASIC TRENDS
Summary and Cumulative Data (Table 3)
In total, the 42 industries recorded a 3.3 percent rise in the number of companies between 1987 and 1992, while the number of establishments (production facilities) grew 3.8 percent. Employment declined almost 9 percent for these industries between 1987 and 1992, but it had risen 15 percent in the 1982-87 period.
[TABULAR DATA 3 OMITTED]Although the total value of industry and product shipments, value added, and cost of materials for these industries rose between 1987 and 1992, they increased much faster in the previous 5-year period.
Number of Companies and Establishments (Table 4)
In number of companies, plastic plumbing fixtures experienced the fastest growth between 1987 and 1992, up almost 100 percent. The hard surfaced floor covering industry was second with a 50 percent rise. These same two industries also experienced the greatest increases in the number of establishments. The flat glass, clay brick, heating equipment, and mobile home industries all had sizable declines in both companies and establishments, although the flat glass decline was due mainly to a reclassification of many firms into another SIC code.
[TABULAR DATA 4 OMITTED]Employment and Payroll (Table 5)
From the standpoint of employees and production workers, the largest of the 42 industries in 1992 were sawmills, air conditioning & warm air heating, sheet metal work, ready mixed concrete, fabricated structural metals, and millwork. Among the smallest were structural clay products nee), plastics plumbing fixtures, hard surfaced floor coverings, metal sanitary ware, ceramic tile, and vitreous plumbing fixtures.
[TABULAR DATA 5 OMITTED]Value of Industry and Product Shipments (Table 6)
In shipments, the largest of the building materials industries in 1992 were sawmills, air conditioning & heating, paints & varnishes, ready-mixed concrete, and sheet metal work. The smallest were structural clay products (nec), ceramic tile, metal sanitary ware, vitreous plumbing fixtures, and elevators & moving stairways.
[TABULAR DATA 6 OMITTED]The industries showing the fastest growth in shipments between 1987 and 1992 were plastic plumbing fixtures, reconstituted wood products, structural wood members, environmental controls, sawmills, and current-carrying wiring devices. Several industries recorded substantial declines in shipments (10 percent or more) comparing 1992 with 1987. These include gypsum products, structural clay products (nec), flat glass (note comparability footnote on table 6), prefab wood buildings, elevators & moving stairways, asphalt paving materials, and clay brick. These substantial declines mainly reflect the strong construction market in 1987 compared to a weaker 1992 which was just beginning to recover from the 1990-91 recession.
Value Added and Cost of Materials (Table 7)
As one might expect, the industries with the largest shipment values tended to also have the highest level of value added and cost of materials in 1992. Many industries, however, recorded declines in value added between 1987 and 1992. The largest declines were for gypsum products, elevators & moving stairways, structural clay products (nec), flat glass, and prefab wood buildings. Sizable increases were recorded by plastics plumbing fixtures, reconstituted wood products, cut stone and stone products, structural wood products, and environmental controls.
[TABULAR DATA 7 OMITTED]Comparing 1992 with 1987, the cost of materials also declined for many of the 42 industries. The largest percent declines (in addition to those for value added), were for clay brick, concrete block & brick and asphalt paving mixtures. Among the largest percent increases in cost of materials were for the same industries as on the value added list, plus sawmills.
1992 Selected Operating Ratios (Table 8)
We selected 6 of the 9 ratios provided in the Census of Manufactures reports for inclusion in this table. A brief summary of these ratios for the 42 industries follows:
* Average hourly earnings of production workers: The average hourly earnings for the 42 industries was $11.28. The highest was for the flat glass industry at $17.39 per hour and the lowest was for the residential lighting fixture industry, at $7.85.
* Annual hours of production workers: The average number of hours for the industries was 2,068, with the highest, gypsum products, at 2,289. The lowest was for prefabricated wood buildings, at 1,873.
* Cost of materials as percent of value of shipments: The average for this ratio was 50 percent. The miscellaneous structural metal work industry was highest with 66 percent and the vitreous plumbing fixtures had only a 26 percent cost of materials to value of shipments ratio.
* Value added per employee: This ratio averaged $70,166 per employee in 1992. The highest was for paints & varnishes, at $139,818 and the lowest was for structural wood members, at $42,566.
* Payroll as percent of value added: Payroll averaged 41 percent of value added for these industries. There were several industries at or slightly above 50 percent, the highest being miscellaneous structural metal work at 52 percent. The lowest was paints & varnishes at 24 percent.
* Value added per production worker hour: These industries averaged $46.56 an hour, with paints varnishes by far the largest at $134.56 and mobile homes the lowest at $26.74.
[TABULAR DATA 8 OMITTED]SUMMARY
Although statistics from the Census and Annual Survey of Manufactures usually lag the current year by 2 to 3 years when they are released, the reports provide a comprehensive look at the U.S. manufacturing sector and, specifically for this article, a picture of the many different SIC industries that supply most of the materials needed by the construction sector.
When we did the previous article covering the 1987 data, the trends reflected a strong 1987 market compared to a relatively strong 1982 market. This time the reader must consider, in a trend analysis, that 1987 was a strong year for construction but that 1992 was a weaker year characterized by the beginning of a recovery from the 1990-91 recession. (See Figure 2.)
[Figure 1-2 ILLUSTRATION OMITTED]COPYRIGHT 1995 U.S. Department of Commerce
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