Construction still a drag on growth

Overall U.S. job growth continued to be undermined by the severe downturn affecting the construction industry as another 75,000 construction workers lost their jobs in January 2010 and the industry’s unemployment rate jumped to 24.7 percent, according to federal employment figures released Feb. 5.

Excluding construction job losses, non-farm payroll employment actually rose for the second time in three months, the Associated General Contractors of America noted.

“Unlike the rest of the economy, the construction industry continues to shed jobs at virtually the same rate in January as it has for the past twelve months,” said Ken Simonson, the association’s chief economist. “The stimulus appears to be the only bright spot for an industry suffering from depression-era unemployment levels.”

Simonson noted that heavy and civil engineering construction employment, which includes highway construction, was unchanged for the month of January. He suggested that stimulus-funded construction activity was helping keep employment stable in that one industry category.

Overall declines in construction activity, however, have cost 926,000 construction workers their jobs since January 2009, a 14.1 percent drop, the construction economist noted. He added that construction accounted for nearly one-quarter of all job losses in the past 12 months (926,000 out of 4 million, 23 percent), even though the industry employs only 4.3 percent of all nonfarm payroll employees (5.6 million out of 129.5 million).

The construction industry’s troubles are having a broad impact, Simonson noted. Earlier this month, for example, pipe-maker Mueller Water Products was forced to close an iron pipe plant in North Birmingham, Alabama, citing, in part, decreased demand for its products. And he warned that with architectural services employment down 14.6 percent over the past 12 months, there are likely to be fewer projects later this year.

“Any effort by Congress and the Administration to address the nation’s unemployment challenges must include significant new investments in infrastructure,” said Stephen E. Sandherr, the association’s chief executive officer. “As today’s report makes clear, without those investments, a bad jobs picture will only get much worse.”