June construction unemployment rate lowest since 2008, but skilled-labor shortage may be looming
| July 06, 2012 |
Though the unemployment rate among construction workers in June dropped to its lowest rate since 2008, one economist says that’s not necessarily good news.
In an analysis of June construction employment released July 6, Ken Simonson, chief economist at the Associated General Contractors of America, said the 12.8 percent unemployment rate for former construction workers was down from 15.6 percent in June 2011 and way down from the 20.1 percent rate in June 2010.
However, rather than stay in construction or return to construction jobs once they were available again, Simonson says that in the past two years, nearly 750,000 experienced construction workers have either found jobs in other industries, returned to school, retired or left the workforce completely.
“It will be hard for construction firms to get those skilled workers back when demand picks back up,” he said.
Apart from the danger of losing experienced workers, Simonson said the hiring of new workers has stalled as well. While the latest figure was 14,000 higher than one year earlier, the June 2012 total was just 2,000 higher than in May and in June 2010. He warned that a skilled-labor shortage may be forming.
“Employment in the construction industry has fluctuated within a very narrow range—1 percent above or below the June level of 5.5 million—for more than two years now,” Simonson said. “Construction employment has essentially been stagnant for much of the past two years.”
Simonson said there was little difference among construction segments in terms of recent job gains or losses, Simonson noted. Residential construction added 1,700 total jobs in June and 8,900 (0.4 percent) over 12 months. Nonresidential construction firms lost 600 jobs in June but added 4,300 (0.1 percent) over 12 months.