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Low-level stability is as good as it gets for construction employment

Date Posted: October 1 2010

Nationwide, new construction starts advanced 6 percent from July to August, a trend that shows continued stability – although stability in a lousy market is hardly what the industry needs.

Meanwhile, Michigan continues to hover around the middle of the pack among states when it comes to construction joblessness.

“After languishing in late spring, the pace of construction starts picked up during July and August, returning activity to the upper half of its recent range,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, on Sept. 21. “That range shows total construction starts essentially stabilizing at a low level, relative to its lengthy slide from 2006 through 2008, but not yet moving up to the point where one could say that renewed expansion is taking hold.

“For that to occur, more support on a sustained basis will be needed from housing and nonresidential building, which continue to be dampened by various factors, including tight bank lending and weak demand arising from sluggish job growth.”

Most of the lift this summer came from work in the non-building construction sector – utilities and public works. Nonresidential building slipped back in August after improvement in July. According to McGraw-Hill, for the first eight months of 2010, total U.S. construction on an unadjusted basis came in at $277.7 billion, down 4 percent from the same period a year ago.

Over the course of 2010, the two regions with the greatest amount of construction activity were Northeast, up 6 percent, and the Midwest, down 1 percent.

On a state to state basis, 10 states added construction jobs from August 2009 to August 2010, according to the Associated General Contractors of America. Michigan wasn’t one of them – our state lost 6,700 construction jobs during that 12-month period, a 5.5 percent decline.  That placed us at No. 32 among the states in construction employment.

The number of states that increased construction employment over 12 months was the largest since October 2008.

“National construction employment has been flat since March, and more areas have seen an upturn in employment, while job losses in the remaining states are less severe than previously,” said Ken Simonson, chief economist for the AGC. “But the gains may be fleeting unless Congress and the Administration enact long–term infrastructure funding bills before the current stimulus funds are exhausted.”