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Trades Lead Construction Job Slide

Tuesday, June 5, 2012

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Led by specialty trades and civil engineering, the battered construction industry bled 28,000 more jobs in May—its fourth straight month of job losses and its biggest decline in two years.

The industry’s overall unemployment rate stood at 14.2 percent—nearly double the national average—after shedding more than 2.2 million jobs since April 2006.



The jobless figures and decline in public construction activity should light a fire under Congress’s current debate over a new surface transportation bill, said the Associated General Contractors of America.

The industry’s heavy and civil engineering sector and specialty trades were hardest hit, following a 1.4 percent decline in public construction activity in April, officials said. That decline held overall construction activity growth to just 0.3 percent in May.

Stagnant Job Report

Overall, construction was the biggest loser in the Labor Department’s unexpectedly stagnant May labor report, with overall unemployment stuck at 8.2 percent. Employment increased in health care, transportation, warehousing and wholesale, while other industries were mostly flat.

Manufacturing saw its second straight month of gains, adding 12,000 jobs in May. Fabricated metal products and primary metals added a total of 10,000 jobs. Overall, that industry has added 495,000 jobs since January 2010.

The unemployment rates for adult men (7.8 percent) and Hispanics (11.0 percent) edged up in May, while the rates for adult women (7.4 percent), teenagers (24.6 percent), whites (7.4 percent), and blacks (13.6 percent) showed little or no change, BLS reported.

The number of long-term unemployed (those jobless for 27 weeks and over) grew to 5.4 million in May and accounted for nearly 43 percent of the unemployed.

In addition, 2.4 million people were classified as “marginally attached to the labor force” in May, up from 2.2 million a year earlier. These are unemployed individuals who wanted work and had looked for a job in the prior 12 months.

Those ranks included 830,000 “discouraged” workers who were not currently looking for work because they believe none was available.

Construction Cuts ‘Taking their Toll’

Construction employment reached its lowest level since last August, according to an analysis by the Associated General Contractors of America. Specialty trade contractors lost 18,000 jobs, while heavy and civil engineering construction lost 11,000, BLS reported. Overall, construction employment has shown little change since reaching a low in January 2011.

“With construction employment shrinking for the fourth month in a row, the industry is clearly having a difficult start to the year,” said Ken Simonson, the association’s chief economist.

“In particular, cuts to public sector investments in construction are taking their toll, given that heavy and civil engineering construction experienced the largest employment decline within the sector.”

Total construction employment now stands at 5,516,000—0.5 percent lower than in April but 18,000 (0.3 percent) higher than in May 2011, the economist said.

Spending Inches Upward

Meanwhile, construction spending in April increased by 0.3 percent over the previous month and by 6.8 percent over April 2011 and is now at an annualized rate of $820.7 billion. Private-sector demand for construction expanded by 1.2 percent in May and 12.5 percent year-over-year, but decline in public construction continued to slow overall growth.

AGC officials said the new employment and spending figures underscored the need for quick congressional action on a number of long-term infrastructure measures, including reauthorizing clean water and surface transportation programs.

They said members of Congress participating in a conference committee negotiating what could possibly be a new highway and transportation bill should feel a new sense of urgency about the measure.

“Getting a highway and transit bill passed would certainly help counter any possible backslide in construction employment,” said Stephen E. Sandherr, the association’s chief executive officer.

“While the overall economy will need to be much stronger before private sector construction activity and employment begin to approach pre-recession levels, investments in infrastructure will certainly help put more construction workers back on the job.”


Tagged categories: Construction; Contractors; Infrastructure; Labor; Transportation

Comment from brian ofarrell, (6/6/2012, 7:13 AM)

We need to take advantage of these slow times to upgrade the skills of our employees and start training new apprentices. There will be a severe labour shortage when the economy improves if we do not train during slow growth periods.

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