Good news, bad news on construction employment front

The construction industry lost 2,000 jobs in April, following similar declines of 3,000 in March and 1,000 in February, but still added 63,000 jobs over the past year as the industry unemployment rate shrank to 14.5 percent—the lowest April level in four years, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said that lack of long-term federal highway and transit funding, along with other infrastructure budget cuts, threatens to limit construction job growth.

“The plunge in the unemployment rate for former construction workers from 17.8 percent in April 2011 and 21.8 percent two years ago is good news for them,” said Ken Simonson, the association’s chief economist. “Unfortunately, few of them have found jobs in construction, which actually employed 1,000 fewer workers than it did in April 2010.”

Construction started losing jobs in 2006—more than a year before the rest of the economy—and did not touch bottom until February 2011, a year after other sectors, Simonson pointed out. Even in the past year, there have been construction job losses in half the months, he said.

“It is tough to attract and retain workers when employment gains are so spotty,” Simonson observed. “With workers finding jobs in other industries, retiring or returning to school, contractors face a potential shortage of skilled workers in a year or two.”

Simonson noted that the 1.1 percent increase in construction employment over the past year was shared among all sectors of the industry. Employment among residential specialty trade contractors climbed by 33,100 or 2.3 percent, helped by a large increase in multifamily construction. Heavy and civil engineering employment rose by 18,400 (2.2 percent), thanks to work on power, energy and manufacturing projects. Nonresidential building employment increased by 6,000 (0.9 percent), while nonresidential specialty trade contractors added 3,900 employees, as private hospital, higher education, warehouse and transportation work accelerated. Residential building construction, mainly single-family homebuilding, eked out a gain of 700 workers (0.1 percent), he said.

Association officials said that inadequate long-term funding for infrastructure investment is likely to undermine construction employment gains in coming months. They cited the lack of a multiyear federal highway and transit bill as a particular problem, along with shrinking federal funding for a range of construction projects.