The Building Tradesman Newspaper

Friday, July 12, 2013


By The Building Tradesman

Michigan, happily, broke its string of losing construction jobs in every month during 2013, eeking out a 0.9 percent gain in industry employment from April to May 2013.

That’s the word from a report issued June 21 by the Associated General Contractors, which also reported that construction employment in our state is also losing ground compared to 2012. Michigan lost 1,600 construction jobs from May 2012 to May 2013, a 1.3 percent decrease, ranking us No. 39 in industry job “creation” during that time.

“The strongest recoveries in construction employment have occurred in states with oil and gas activity, while the steepest construction job losses have occurred in Sunbelt states,” said Ken Simonson, the association’s chief economist. “However, patterns for the past year show that even some lagging states are beginning to add jobs.”

Michigan was one of 27 states that added jobs from April to May 2013.

Texas and California added the most jobs from May 2012 to May 2013. North Carolina and Illinois lost the most.  In terms of percentage of construction jobs growth over the past 12 months, leading the way were Arizona (+10.4 percent), Louisiana (+9.4 percent) and Hawaii (+9.3 percent). The bottom dwellers were South Dakota (–4.7 percent), Rhode Island (-6.3 percent) and Montana (-9.7 percent).

In recent decades, the AGC says, Michigan’s peak employment was in April 2000, when our state employed 214,000 construction workers. Today, that number is down to 126,300, a 41 percent drop, one of the steepest drops in the nation. Falling farther and fastest among the states was Nevada. Its peak construction employment level was in June 2006. In only seven years, Nevada’s construction industry fell to a level 66 percent below that peak.

Better jobless numbers, but…

The overall U.S. economy is starting to add more jobs at an accelerated pace – with 195,000 jobs added in June – but the jobless rate remained at 7.6 percent, according to figures released July 5 by the U.S. Bureau of Labor Statistics (BLS).

“The good news is that this is a faster rate of growth than we have been seeing – the average growth rate for the previous 12 months was 169,000,” said the Economic Policy Institute. “However, the current pace of job growth is still slower than what’s needed for economy to return to full employment any time soon.”

Construction employment saw little change from May to June. The jobs report marks 39 straight months of tepid job growth. The economy has added about 200,000 jobs a month for the past three months.

But economists say the growth rate is far too slow to fuel a healthy jobs recovery.  The current pace of job growth is enough to absorb new entrants into the market but makes little dent on the jobs deficit. In fact the numbers are even less encouraging because again in June participation in the workforce declined.

The June 2013 employment report, released this morning by the Bureau of Labor Statistics, marked four years since the official start of the recovery in June 2009 with stronger than recent job growth—the economy added 195,000 jobs in June. Furthermore, there was an upward revision to prior months’ data, bringing the average job growth of the last three months to 196,000.

The good news is that this is a faster rate of growth than we have been seeing—the average growth rate for the previous twelve months was 169,000. However, the current pace of job growth is still slower than what’s needed for economy to return to full employment any time soon. At this pace, it will still be more than five years until we get back to the pre-recession unemployment rate.

While any sign of an improving labor market is encouraging, it’s important to keep in mind that we are in still in second gear, not yet at highway speeds. For example, while the unemployment rate held steady at 7.6% in June, the “underemployment rate”—the U6 measure of labor underutilization—increased a half a percentage point to 14.3%, due to an increase in the number of workers who have part-time jobs but want full time jobs, and an increase in the number of unemployed workers who want a job but have given up looking for work.