News for Masons: Construction Unemployment at Lowest June Level Since 2008

The unemployment rate for construction workers fell below double digits in June for the first time since 2008 as every segment of the industry added employees, according to an analysis of new government data by the Associated General Contractors of America. Association officials said the relatively positive jobs report for the sector highlights the need to address potential shortages of skilled and entry-level workers.

“Construction employment in June was the highest since August 2009,” says Ken Simonson, the association's chief economist. “But employment is still down by one-quarter from the peak more than seven years ago. Many of those laid-off workers have left the industry, whether for employment elsewhere, more education or retirement, construction companies face a looming worker shortage.”

The unemployment rate for workers who last worked in construction declined to 9.8 percent from 12.8 percent in June 2012, not seasonally adjusted, and the number of unemployed construction workers dropped by 214,000 to 825,000. The latest numbers were the best June figures for each series since 2008, Simonson noted.

Construction employment in June totaled 5,812,000, an increase of 190,000 or 3.4 percent over the past year. Aggregate weekly hours of all new and existing construction employees expanded by an even larger 4.7 percent, as companies put more workers on overtime.

“The number of unemployed workers with construction experience has fallen to low enough levels that firms in a growing number of locations and segments are having trouble finding people with the needed skills,” Simonson says. “Contractors have filled the gap so far by adding to workers’ hours but this ‘solution’ may be reaching its limit.”

Residential and nonresidential contractors have added workers in nearly equal numbers, Simonson observed. Residential building and specialty trade contractors added 5,200 in June and 90,200 (4.4 percent) over 12 months. Nonresidential building, specialty trade and heavy and civil engineering construction firms grew by 8,400 workers in June and 99,800 (2.8 percent) from a year earlier. In a favorable sign for future construction growth, architectural and engineering services employment rose by 2.6 percent over the year.

Association officials said some of the future worker shortages that will come if the industry continues to add jobs over the coming months might still be averted. They urged education officials to rebuild skills-based, or vocational, educational programs designed to help prepare students for careers in construction and manufacturing. And they urged Congress and the administration to reject the arbitrary caps on construction workers that are currently included in the Senate’s immigration legislation.

“Now that demand for construction is finally picking up, it is vital to ensure that the industry can find enough qualified workers,” says Stephen E. Sandherr, the association’s chief executive officer. “There are actions that policy makers should take now before a worker shortage cuts short the industry’s recovery.”

Construction Employment Up in 170 of 339 Metro Areas, April 2012 - 2013

Construction employment increased in 170 out of 339 metropolitan areas between April 2012 and April 2013, declined in 123 and was stagnant in 46, according to a new analysis of federal employment data released today by the Associated GeneralContractors of America. Association officials noted that a majority of metro areas are adding construction jobs as private sector demand accelerates in many parts of the country.

“Demand for construction continues to grow in many parts of the country amid increasing private sector investments in new residential, energy and supply chain facilities like factories, rail lines and warehouses,” says Ken Simonson, the association’s chief economist. “These private sector gains appear strong enough in many parts of the country to outpace declining public sector investments in infrastructure and buildings.”

Pascagoula, Miss., added the highest percentage of new construction jobs (45%, 1,700 jobs), followed by Napa, Calif. (36 percent, 800 jobs); Merced, Calif. (19%, 300 jobs); Baton Rouge, La. (16%, 6,600 jobs) and Lake Charles, La. (16%, 1,400 jobs). 

Two metro areas in Texas virtually tied for the most jobs added in the past 12 months: Dallas-Plano-Irving (11,500 jobs, 11%) and Houston-Sugar Land-Baytown (11,400 jobs, 6%). They were followed by Los Angeles-Long Beach-Glendale, Calif. (9,400 jobs, 9%); Fort Worth-Arlington, Texas (7,800 jobs, 13%) and Phoenix-Mesa-Glendale, Ariz. (7,500 jobs, 9%).

The largest job losses were in Chicago-Joliet-Naperville, Ill. (-5,900 jobs, -5%), followed by Northern Virginia (-3,200 jobs, -5%); Cincinnati-Middletown, Ohio-Ky. (-2,400 jobs, -6%) and Raleigh-Cary, N.C. (-2,300 jobs, -8%). Bellingham, Wash. (-20%, -1,300 jobs) lost the highest percentage. Other areas experiencing large percentage declines in construction employment included Decatur, Ill. (-18%, -700 jobs); Eau Claire, Wis. (-17%, -500 jobs) and Rockford, Ill. (-17%, -700 jobs).

Association officials said that improving construction employment was masking longer-term problems that could come from declining public sector investments. They noted, for example, that economic growth could suffer as aging transportation infrastructure forces firms to pay more to ship goods. At the same time, increasing construction employment means more areas could experience worker shortages in the near future amid a lack of available workers with experience in certain key construction skills.

“Declining investments in infrastructure and other public assets could ultimately undermine the very growth that is currently boosting employment,” says Stephen E. Sandherr, the association’s chief executive officer. “With hiring on the rebound in many areas, we also need to rebuild vocational education programs and rethink immigration construction caps to ensure there are enough skilled workers available to meet growing demand.”

View construction employment figures by state and rank.

 

Good News for Masons: Construction Unemployment Drops to Lowest April Mark in Five Years

The unemployment rate for construction workers fell to the lowest April level in five years as contractors added more than 150,000 employees in the past year despite a dip in employment last month, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that, despite the monthly drop, the industry is likely to continue adding jobs for much of 2013.

“It is heartening to see that both nonresidential and residential segments of the construction industry added significant numbers of workers in the last 12 months, even though gains from March to April were limited to the residential side,” says Ken Simonson, the association's chief economist. “Other indicators, such as the continuing growth in architectural and engineering employment, suggest that demand for construction will expand further.”

Seasonally adjusted construction employment of 5.79 million in April was 6,000 less than in March, but 154,000, or 2.7 percent, higher than in April 2012, Simonson notes. Residential building and specialty trade contractors added 13,300 workers in the month and 83,700 (4.1 percent) over 12 months. Nonresidential building and specialty trade contractors, along with heavy and civil engineering construction firms, lost 19,700 employees in April, but added 70,100 (2 percent) over 12 months. Architectural and engineering services employment climbed by 2,700 in the month and 23,400 (1.8 percent) from a year earlier.

The unemployment rate for jobseekers who last worked in construction fell to 13.2 percent from 14.5 percent in April 2012, the lowest April level since 2008. Three years ago, in April 2010, the rate was 21.8 percent. The industry unemployment rate is not seasonally adjusted and, thus, can be compared to the same month in past years but not month to month.

“The ongoing decline in the construction unemployment rate is only partly a result of opportunities in the industry,” Simonson says. “Unfortunately, many former workers have now left the industry, perhaps permanently, which will make further recovery in construction more difficult.”

Association officials said that if construction employment grows as expected during the coming months, it will become increasingly difficult for employers in particularly fast growing market regions and segments to find qualified workers. They added that a lack of domestic skill-based educational programs and arbitrary caps on the number of construction workers in proposed immigration legislation would make it harder for firms to keep up with growing demand.

“It will not take a lot of growth in demand before many construction firms are scrambling to fill positions with skilled workers,” says Stephen E. Sandherr, the association’s CEO. “We need to provide significantly more opportunities for students to learn skills-based crafts like construction and avoid imposing artificial limits on the size of the construction workforce in immigration legislation.”

Good News for Masons: Construction Employment Hits Three-Year High

The construction industry added 48,000 jobs in February, the ninth-consecutive month of job growth for the sector, as more people are working in construction than at any point in the last 3.5 years, according to an analysis of new government data by the Associated General Contractors of America. Association officials cautioned, however, that employment gains remain tenuous and could be undermined if Washington officials fail to reach a deal on federal investment levels later this month.

“With construction employment increasing by the largest amount for a single month in nearly six years, the steady improvement in construction hiring is particularly encouraging,” said Ken Simonson, the association's chief economist. “The job gains are coming from every part of the construction industry and while the sector’s unemployment rate remains stubbornly high, it is heading in the right direction.”

Construction firms employed 5.78 million people in February, a gain of 48,000 from January and 140,000 or 2.5 percent from a year ago, Simonson noted. The industry unemployment rate, which is not seasonally adjusted and thus is typically high in February, fell from 17.1 percent in February 2012 to 15.7 percent last month.

Both residential and nonresidential construction added jobs for the month and year. Residential construction—building and specialty trade contractors—added 19,400 jobs in February and 64,200 (3.1 percent) over 12 months. Nonresidential construction—building, specialty trade, and heavy and civil engineering construction—expanded by 29,000 employees in February and 75,700 (2.1 percent) over the year-ago level.

“Both single- and multifamily homebuilding have been accelerating for several months and should continue to add jobs in the near future,” Simonson said, noting that he expects construction employment may increase by 250,000 in 2013. “On the private nonresidential side, there will likely be strong growth in power and energy-related projects, manufacturing and distribution facilities and private college construction. However, public construction remains weak.”

Association officials said that recent improvements in construction employment could be undermined if Congress and the Obama administration fail to reach an agreement to fund federal operations known as a continuing resolution by the time the current one expires on March 27. Should Washington officials fail to enact a new continuing resolutions, tens of billions of dollars worth of federal investments in infrastructure and construction projects could be shut down.

“While the new employment figures are encouraging, the construction industry’s recovery remains fragile,” said Stephen E. Sandherr, the association’s chief executive officer, noting that the construction firms employ nearly two million fewer people today than in 2006. “Putting billions of dollars worth of construction projects on hold because Washington officials can’t set a budget threatens to undermine the sector’s recovery just as it is starting to heat up.”

Construction Employment Increased in 33 States and D.C. From November to December

Construction employment expanded in two-thirds of all states in December and in half the nation last year as the industry showed signs of emerging from a six-year slump, according to an analysis by the Associated General Contractors of America of Labor Department data. Association officials noted that contractors responding to a recent survey expect to add more workers in 2013.

“These results show that contractors are finding work in more parts of the country than they have for many months,” says Ken Simonson, the association’s chief economist. “Further gains appear likely but could be derailed if lawmakers do not keep debt markets operating normally.”

For 2012 as a whole, 24 states and the District of Columbia added construction jobs, 24 shed workers and two—Vermont and West Virginia—had no change. Nebraska jumped to the top ranking for percentage of new construction jobs (10.1 percent, 4,100 jobs); followed by D.C. (7.3 percent, 900 jobs); Texas (6.6 percent, 36,800 jobs); Hawaii (6.5 percent, 1,800 jobs) and Washington (6.5 percent, 9,000 jobs). Texas added the most new construction jobs over the past 12 months, followed by California (24,500 jobs, 4.4 percent), Washington and Arizona.

Among states losing construction jobs during the past year, Rhode Island lost the highest percentage (-6.7percent, -1,100 jobs), followed by Delaware (-5.8 percent, -1,100 jobs); Mississippi (-5.6 percent, -2,700 jobs) and Arkansas (-5.6 percent, -2,600 jobs). Illinois lost the most jobs (-8,600 jobs, -4.5 percent); followed by Pennsylvania (-7,700 jobs, -3.4 percent) and Florida (-16,800 jobs, -2.1 percent).

Simonson noted that 33 states and D.C. added construction jobs between November and December, while employment slipped in 16 states and held steady in Utah. Wisconsin had the largest percentage increase (5.8 percent, 4,900 jobs); followed by D.C. (3.9 percent, 500 jobs) and New Jersey (3.6 percent, 4,300 jobs). Utah had no change in construction employment over the month, while 16 states lost jobs, with Rhode Island having the steepest percentage drop (-5.6 percent, -900 jobs); followed by Montana (-4.1 percent, 1,000 jobs) and Minnesota (-3.6 percent, 3,500 jobs). Texas lost the largest number of jobs for the month (-4,100 jobs, -0.7 percent); followed by Florida (-3.500 jobs, -1.1 percent) and Minnesota.

“Construction spending has been rising for two full years but contractors have been cautious about adding workers until they knew the upturn would last,” Simonson says. “In 2013, both residential and private nonresidential construction should rise enough to offset a further slowdown in public work, and contractors will be looking for more workers.”

Association officials said the monthly construction employment gains were consistent with results of its recently released 2013 Construction Hiring and Business Outlook, where 31 percent of firms reported plans to add new workers this year compared to only 9 percent that plan to make layoffs, a net positive reading of 22 percent. Officials cautioned that construction firms still face significant headwinds, noting that most firms expect public construction activity to continue to decline and remain cautious about plans to acquire new equipment.

“There is a growing sense of optimism within the construction community that the worst is over,” says Stephen E. Sandherr, the association's CEO. “At the same time, however, just because the worst is over doesn't guarantee that conditions are going to get significantly better anytime soon, especially if Washington can't find a way to address out-of-control entitlement spending that is making it increasingly difficult to invest in aging infrastructure and other important construction programs."

View the state employment data by rank and by state.

Construction Adds 30K Jobs From November to December

Construction employers added 30,000 jobs in December, while the industry's unemployment rate hit 13.5 percent, according to an analysis of new federal data released by the Associated General Contractors of America. Association officials noted that the monthly increase was the largest in nearly two years, driven primarily by increases in private sector demand for construction.

“Resurgent demand for new housing construction and modest growth in private commercial construction are helping create some new construction jobs,” says Ken Simonson, the association's chief economist. “Now that the threat of the fiscal cliff has been – temporarily – relieved, construction employment should continue to slowly rise in 2013.”

Construction firms employed 5.564 million people in December, up from 5.534 million in November, Simonson notes, an increase of 0.5 percent. However, the sector's overall employment in December was only 18,000, or 0.3 percent, higher than one year earlier when firms employed 5.546 million workers. The industry unemployment rate fell from 16 percent a year earlier, indicating that formerly unemployed construction workers are leaving the industry at a faster rate than they are being rehired.

Both residential and nonresidential construction added jobs in December, with residential construction outpacing nonresidential construction for the month. Residential construction added 18,100 jobs in December, with residential building contractors adding 5,800 employees and residential specialty contractors adding 12,300 new workers. Residential construction employment is now up by 29,800, or 1.5 percent, compared to 12 months ago.

Nonresidential contractors added 11,900 jobs (0.3 percent) in December, but are down by 12,400 jobs (-0.4 percent) compared to one year ago. Nonresidential specialty trade contractors added 5,600 jobs for the month, while nonresidential building contractors added another 7,000 jobs. However, heavy and civil engineering construction firms lost 700 jobs during the month, dragged down by continuing cutbacks in government infrastructure spending.

Association officials said the growth in construction employment was likely restrained by uncertainties about what federal tax and spending levels would be in 2013 as Washington officials worked to address the pending fiscal cliff. They noted that the stopgap measure passed early in January would do little to resolve broader fiscal problems that are making it increasingly difficult for the federal government to invest in vital infrastructure projects.

“Until Washington can address the broader challenge of out-of-control entitlement spending we are going to see more political standoffs like the fiscal cliff and fewer investments in infrastructure,” says Stephen E. Sandherr, the association’s CEO. “Congress and the administration need to focus their energy on addressing the fiscal imbalances that are the root cause of these recurring political crises.”