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Good news for construction tempered by scarce work in infrastructure

Date Posted: December 19 2014

Just when you thought it was safe to declare that the U.S. construction industry is on the road to recovery…

Well, it probably still is, but this is usually not an industry that has smooth trend lines. The Bureau of Labor Statistics reported Dec. 5 that construction unemployment jumped to 7.5 percent in November, up from 6.4 percent the month before. Still, it was an improvement from the 8.6 percent industry jobless rate that was present as recently as May 2014. Despite the climb in joblessness, the construction industry added 20,000 jobs in November.

But the Associated General Contractors cautioned that there might be some more potholes ahead for the industry.

“November was another good month overall for construction workers and businesses,” said Ken Simonson, the association’s chief economist. “Yet the recent declines in public works and nonresidential building construction employment may indicate some underlying weakness in the construction market.”

Construction employment totaled 6,109,000 in November, the highest total since April 2009, with a 12-month gain of 213,000 jobs or 3.6 percent, Simonson noted. Residential building and specialty trade contractors added a combined 16,700 employees since October and 122,800 (5.6 percent) over 12 months. Nonresidential contractors hired a net of 3,600 workers for the month and 90,100 (2.4 percent) since November 2013. However, the heavy and civil engineering construction segment, which includes most forms of public works construction, lost 1,300 jobs in November, while nonresidential building construction lost 2,400 jobs.

AGC officials said the overall construction employment gains were welcome news for an industry hard hit during the downturn. But they cautioned that demand appeared to be falling for workers in the nonresidential and public-sector segments of the industry. They urged Congress and the administration to work together to address the nation’s crumbling infrastructure, saying that swift passage of a new highway and transit bill could bring needed stability to the public-sector market.

“While the overall construction industry appears to be recovering, this month’s data is not entirely positive,” said Stephen E. Sandherr, the association’s chief executive officer. “What the data shows us is this industry would be a lot better off, as would the broader economy, if Washington could figure out how to pay for and enact a long-term highway and transit bill, as well as other measures to fix our crumbling infrastructure.”