The Building Tradesman Newspaper

Friday, November 09, 2012

State’s construction jobs picture takes modest move toward middling

By The Building Tradesman

In Michigan, getting to average construction industry growth among the states has been a modest goal for the last decade or so.

That’s starting to happen: it’s only in the last two years that we’ve been actually seeing the needle move from poor to average. But of course, “average” isn’t saying much: construction employment declined in 28 states last month. And as you can see by the article on this page about projected activity in 2013, the whole country is still struggling to get back to a good construction economy, last seen here-about in 2005.

The Associated General Contractors of America on Oct. 19 reported that Michigan’s construction employment grew by 2.3 percent between September 2011 and Sept 2012. That places us at No. 30 among the states in terms of construction employment growth. And in the last two months of the summer, Michigan  moved to the top half of the rankings, coming in at No. 9 in construction job growth from August to September .

Michigan added 2,700 construction jobs from August 2012 to September 2012, a 2.3 percent increase, and the fifth highest increase in the nation. But here’s the part about how getting to average isn’t all it’s cracked up to be: Michigan moved its ranking from No. 39 to No. 30 in construction employment over the previous year, but as of September , was down 3,000 jobs (-2.4 percent) from September 2011.

“Even though a good number of states added jobs in September , most states have a smaller construction workforce than they did a year ago,” said Ken Simonson, the AGC’s chief economist. “Between the fiscal cliff, unset tax rates and declining public sector investments, there are a lot of construction projects on hold as owners wait for a clearer picture of where the economy is heading.”

Among states losing construction jobs during the past year, Alaska lost the highest percentage (-16.1 percent, -2,400 jobs), followed by New Jersey (-10.2 percent, -13,400 jobs) and Nevada (-9.4 percent, -5,000 jobs). New Jersey lost the most jobs, followed by New York (-12,500, -4.1 percent), Pennsylvania (-9,100 jobs, -4.1 percent), North Carolina (-8,400 jobs, -4.7 percent) and Illinois (-8,400 jobs, -4.4 percent).

Washington D.C., Nebraska, North Dakota, West Virginia and Texas were the biggest year to year job gainers through September .

Association officials said that construction employment was suffering because of the federal government’s failure to act on a range of tax, spending and infrastructure programs. They added that the political uncertainty wasn’t just affecting the public sector market, with construction firms reporting many private sector projects appear to be on hold until Congress sets tax rates, addresses the fiscal cliff and acts on vital infrastructure measures.

“A lot of businesses are wary of investing in new construction activity when they don’t know where the economy is heading or even what tax rates they will have to pay next year,” said Stephen E. Sandherr, the association’s chief executive officer. “Economies don’t thrive amid uncertainty and inaction.”

In terms of local construction activity, the AGC’s survey revealed that two regions in Michigan were near the bottom of 337 communities from September 2011 to September 2012. Construction employment in East Lansing-Lansing (#334) dropped 19 percent in the 12-month period, while Detroit- Livonia- Dearborn (#324) dropped 12 percent. The states’s “hottest” region for construction: Warren- Troy- Farmington Hills (+4 percent, tied at No. 68).