Construction employment is approaching a 14-year low, the Associated General Contractors of America says. The AGC reported that the construction industry lost 21,000 jobs in September. Construction unemployment is at 17.2 percent.
“It has taken less than four years to erase a decade’s worth of job gains as the industry suffers from declining private, state and local construction demand,” said Ken Simonson, the association’s chief economist. “No other sector of the economy has suffered as much for as long as construction.”
Simonson said that the 5.6 million people working in construction today is barely higher than the 5.59 million people who were working in construction in August 1996. He added that construction employment continues to lag behind other sectors of the economy. While total private employment rose by 593,000 during the past 12 months, the construction industry lost 210,000 jobs. Meanwhile, the industry’s unemployment rate is nearly double the unadjusted national rate of 9.2 percent, he said.
Most of September 2010’s construction job losses came from the nonresidential sector as demand for commercial facilities and infrastructure projects remains weak, Simonson said. Residential construction lost 2,500 jobs in September while nonresidential construction lost 18,100 jobs. Nonresidential specialty trade contractors were the hardest hit, having lost 19,500 jobs in September.
Association officials noted that construction spending figures released for September show that private, state and local construction spending continues to decline. And while federal spending has increased, most of those investments have come from temporary programs like the stimulus and military base realignment programs.
While these temporary federal programs have helped the industry, many contractors are reluctant to expand payrolls while long-term federal programs that fund highway, transit, water system and aviation related construction remain in limbo, association officials said. They added that most contractors don’t even know what their tax rates will be for next year.
“Construction firms aren’t going to start hiring again until they can predict how busy they’ll be,” said Stephen E. Sandherr, the association’s chief executive officer. “Frankly it is hard for contractors to make any business decisions when they don’t know how much they’ll make or how much they’ll owe.”