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Construction Employment Takes Another Dive

Aug 1, 2010 12:00 PM

Construction industry suffering from unemployment rates nearly double the national average

Construction employment decreased by 11,000 between June and July while the industry’s unemployment rate hit 17.3%, according to a recent analysis by the Associated General Contractors of America of federal employment data. Despite stimulus funds, this is the third month of construction employment declines, a sign that, according to AGC officials, reflects overall weak demand for private-, local-, and state-funded construction.

“The fact that this industry continues to suffer from unemployment rates nearly double the national average is a reflection of how much demand for construction has cratered in little more than two years,” says Stephen E. Sandherr, AGC’s CEO. “Worse yet, there’s every indication that, as the benefits of the stimulus fade, the industry’s employment picture will get even worse.”

Since July 2008, Sandherr notes that construction employment has declined by a total of 1,591,000 jobs — a 22% drop. Even though the industry accounts for 4% of the non-farm workforce, Sandherr points out it has experienced 23% of the total job losses over the past two years. “The sad fact is that construction workers have been forced to endure depression-like conditions for far too long,” he says.

Heavy and civil engineering construction — the category that covers most workers in transportation, power, water, and wastewater construction — lost 700 workers in July and has held roughly steady since last October, as federal stimulus funds have boosted construction in these categories. Nonresidential specialty trade contractors were a lone bright spot, gaining 8,000 workers in July.

Noting continued high retail, commercial, and manufacturing vacancy rates and depressed state and local tax revenues, AGC officials suggest overall construction demand is unlikely to increase until at least 2011 — and possibly much later in many areas of the industry. Given the fact that many stimulus-funded construction projects are likely to end later this year, AGC is urging Congress and the Administration to pass a host of long-delayed infrastructure bills to finance new highway, transit, water, and utility projects that are crucial to America’s global economic competitiveness.

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