Construction Employment Declines Over Fiscal Cliff Anxiety

Barely one-third of states added construction jobs on either a monthly or annual basis in November, as the prospect of a more severe contraction in 2013 keeps hiring down, according to an analysis by the Associated General Contractors of America of Labor Department data. Association officials noted that the threat of the looming fiscal cliff’s spending cuts and tax increases is offsetting slight growth in construction spending and keeping employment levels down.
 

“While construction spending has been rising for over a year, contractors have held down employment levels out of fear that failure in Washington to avoid the ‘fiscal cliff’ will trigger a recession and cause many projects to be canceled,” says Ken Simonson, the association’s chief economist. “If the nation can get past this unnecessary, self-induced crisis, there should be a strong upswing in construction hiring in 2013.”

Simonson noted that only 20 states and the District of Columbia added construction jobs between November 2011 and November 2012, while employment shrank in 30 states. Hawaii jumped to the top ranking for percentage of new construction jobs (8.4 percent, 2,300 jobs), followed by Nebraska (7.3 percent, 3,000 jobs), Texas (6.7 percent, 37,400 jobs), Minnesota (6.5 percent, 5,900 jobs) and Arizona (6.2 percent, 7,000 jobs). Texas added the most new construction jobs over the past 12 months, followed by California (26,400 jobs, 4.8 percent), Arizona and Minnesota.

Among states losing construction jobs during the past year, Delaware again lost the highest percentage (-8.9 percent, -1,700 jobs), followed by Nevada (-8.2 percent, -4,400 jobs) and Arkansas (-7.3 percent, -3,400 jobs). New York lost the most jobs (-16,100 jobs, -5.2 percent), followed by Illinois (-11,200 jobs, -5.9 percent) and Pennsylvania (-10,700 jobs, -4.8 percent).

Among the 19 states that added construction jobs between October and November, Vermont had the largest percentage increase (4.4 percent, 600 jobs), followed by Louisiana (4.0 percent, 4,900 jobs) and Nevada (3.1 percent, 1,500 jobs). Michigan had no change in construction employment over the month, while 30 states and D.C. lost jobs, with D.C. having the steepest percentage drop (-7.4 percent, -1,000 jobs). Texas lost the largest number of jobs for the month (-8,300 jobs, -1.4 percent). Indiana had the second-steepest and second-largest declines (-4.8 percent, -6,200 jobs).

Association officials said the threat of the fiscal cliff was already having an impact on construction employment in most states. They noted that a survey of several hundred construction firms the association released earlier this month found that many firms have already delayed hiring or reduced staff because of the threat of federal spending cuts and tax increases included in the fiscal cliff.

“Thousands of construction workers will be spending the holidays wondering if their leaders in Washington can resolve the fiscal cliff before it costs even more jobs,” says Stephen E. Sandherr, the association's chief executive officer. “Cutting key investments and raising taxes on employers will undermine any chances for a construction industry recovery next year.”

View the state employment data by rank and by state.