The Building Tradesman Newspaper

Friday, November 06, 2009

When it comes to employment,the hits just keep on coming

By The Building Tradesman

Construction employment again declined in large numbers in all but one state this September compared to last year, according to an analysis of new state-by-state employment figures released Oct. 21 by the federal government.

The analysis, conducted by the Associated General Contractors of America, also found that the number of states gaining construction jobs from August to September 2009 declined after increasing during the two previous months.

And overall in the U.S., new U.S. construction starts in September fell 7% to a seasonally adjusted annual rate of $399.1 billion, according to McGraw-Hill Construction.

“While there’s little doubt construction employment would have been worse without the stimulus, there’s no question that the industry continues to shed jobs at an alarming rate,” said Ken Simonson, chief economist for the association. “The stimulus remains an important measure, but until private-sector demand for construction resumes, there’s little chance the current construction employment decline will turn around or even stop.”

The five biggest percentage losses in construction employment over the year through September occurred in Nevada (27.8 percent, or 31,100 jobs), Arizona (25.3 percent, or 45,900 jobs), Michigan (22.3 percent, or 15,700 jobs), Tennessee (21.5 percent, or 28,400 jobs) and Kentucky (19.5 percent or 16,500 jobs).

Simonson said that 41 states saw double-digit percentage decreases in construction employment for the year. Meanwhile, construction employment only expanded in Louisiana during the past year, with a 2.1 percent increase, totaling 2,800 jobs.

From August to September, Michigan was once again in the wrong top 10 list among the states (tied for 5th worst), shedding 3,400 construction jobs or losing another 2.8 percent of building trades jobs.

“These figures should serve as a sobering reminder that public investments alone are not going to turn around a trillion dollar construction industry,” said Stephen E. Sandherr, the AGC’s chief executive officer. “The three most important issues in Washington ought to be jobs, jobs and jobs….”

The Dodge Index tracking total U.S. construction bottomed out in February, after a steady decline over the previous year, and since then has shown hesitant improvement. “The September decline for construction starts is one more reminder that the very modest upward trend that seemed to take hold during the spring will be uneven and at times halting,” said Robert A. Murray vice president of economic affairs for McGraw-Hill Construction. “More of this uneven performance can be expected in coming months, given the divergent behavior from construction’s main sectors.

“On the plus side, the steep decline for single family housing has reached its end, and funding from the stimulus act is beginning to have a broader impact beyond highways and bridges, encompassing more government buildings and more environmental public works. On the negative side, further employment declines and tight bank lending will drag down commercial building well into next year.”

Overall, according to the labor-backed Economic Policy Institute, 5.2% of U.S. jobs have been lost since the start of the recession (December 2007). In September, Arizona became the first state to have lost 10% of its total jobs to the recession – something that has only occurred once in the past four recessions (in 1982-82, when Wyoming lost 10% of its jobs).

Michigan, of course, isn’t far behind, having shed 9.8 percent of its jobs since the start of the recession.