Construction Unemployment Spikes in July

Aug 27, 2009 12:00 PM

Construction's unemployment rate jumped in July to 18.2%, from 17.4% in June, according to a recent report from the U.S. Bureau of Labor Statistics (BLS). The July jobless rate also was well above the 8% level posted in July 2008.

In its monthly employment report, released Aug. 7, BLS said construction lost another 76,000 jobs in July, adjusted for seasonal variations, compared with average losses of 73,000 over the past three months. The industry has shed more than 1.3 million jobs since the recession began.

BLS's report also shows a continued discrepancy between construction's jobless rate and the nation's overall rate, which stood at 9.4% in July, down slightly from June's 9.5%. "I don't see any good news for construction in these figures," says Ken Simonson, chief economist for the Associated General Contractors, Arlington, Va. Simonson notes that the BLS job-loss numbers for the residential and non-residential construction sectors were "both bad" in July. Residential's total employment dropped 1.1% from June's level and 16.4% from the year-earlier level, seasonally adjusted. Non-residential construction's rate fell 1.3% from the June mark and 13.8% from the July 2008 number. "I do expect going forward that we will see the residential decline slow or perhaps reverse," Simon says. He believes that by the end of 2009, there will be enough single-family home building and home improvement work to produce an upturn in that segment. But he says, "I don't have much hope for non-residential construction."

Simonson does expect that the heavy and civil construction employment picture will start to improve in the second half of the year as money from the American Recovery and Reinvestment Act starts to flow in markets such as highways and water and sewer projects. But he adds, "It was not evident in July." Jobs in the heavy and civil sector were down 1.2% for the month and 12.4% from July 2008.

Looking at the 12-month trend, construction's jobless rate climbed from 8% in July 2008 to a peak of 21.4% in February this year. It has seesawed since then, declining in March and April, increasing in May, falling in June and going up again last month. The industry's lowest unemployment rate over the past five years came in October 2006, when it registered at 4.5%.

To read the full report, visit the BLS Web site.