The construction unemployment rate jumped to 27.1% and construction employment dropped to a 14-year low as another 64,000 construction workers lost jobs in February, according to the latest federal employment figures.
The economy would have added jobs had it not been for the declines in construction employment for the third time in four months, the Associated General Contractors of America notes.
“While the broader economy may be recovering, the construction industry continues to decline at an alarming rate,” says Ken Simonson, the association’s chief economist. “If these trends don’t change soon, millions of American families will continue to suffer.”
Simonson notes that industry’s job losses in February were consistent with the prior six months and not mainly attributable to exceptionally bad weather. He adds that construction unemployment is at the highest level recorded since the federal government began making the data available in 1976. And he notes that nonresidential construction experienced significantly more job losses than the residential sector in February, 53,500 jobs lost versus 10,600.
Overall declines in construction activity, however, have cost 2.2 million construction workers their jobs since industry employment peaked in June 2006, a 28% drop, Simonson notes. Construction has accounted for 1,936,000 of the 8,425,000 nonfarm payroll job losses since the recession began in December 2007, or 23% of the total, even thought the industry employs only 4.3% of all workers, he adds.
The construction economist says that job losses appeared widespread across construction sectors, with nonresidential specialty trade contractors experiencing the largest monthly decline of 1.7%. He notes that even heavy and civil engineering construction, the sector most likely to be boosted by stimulus funded projects, experienced a 1.1% monthly employment decline.
“The industry has gone from being a symptom of our economic problems to a victim of them,” says Stephen E. Sandherr, the association’s chief executive officer. He says that while the current Jobs Bill prevents declines in federal highway funding, it does little to boost overall infrastructure investments. “Until we see meaningful increases in demand for new infrastructure and private sector construction projects, our economy will continue to suffer.”
Terry O’Sullivan, general president of the Laborers’ International Union of North America, asks, “How many construction job losses will it take before Washington makes a sustained effort to put people back to work building America?
“This is a no-brainer. By passing a build America jobs bills – with at least $40 billion in needed investments to build America’s crumbling roads, bridges, mass-transit, schools and new energy systems -- we can put more than one million men and women back to work and boost our economy. With additional long term investments in our country, we can bring the construction industry to full employment while leaving behind real assets and a positive legacy for generations to come.”
Associated Builders and Contractors 2010 national chairman Jim Elmer, president of James W. Elmer Construction, Spokane, Wash., adds, “It’s unconscionable that congress and the administration are increasing the tax burden and government mandates on an industry that is suffering an unemployment rate of 27.1% – nearly three times the national average.
“Now is the time for Congress and the president to act immediately to free up lending, increase access to financial capital and decrease the tax burden on the construction industry before it is too late,” Elmer says.
On March 2, ABC released its Construction Jobs Creation Proposal that includes the following recommendations: eliminating uncertainty in the business environment by calling on congress and the administration to focus on free-enterprise initiatives and open competition instead of anti-business legislative and regulatory proposals; increasing access to capital for new construction projects and viable, low-risk projects that simply need funding in order for work to commence; providing meaningful tax relief and reducing the tax burden on hard-working Americans and small businesses; enacting a national comprehensive energy plan that includes new construction and upgrades to the nation’s insufficient and crumbling infrastructure; allowing the entire construction industry workforce to participate on federally funded or federally assisted projects; and supporting construction training programs that will attract new skilled workers.