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Only 10 Metro Areas Add Construction Jobs Between February 2009 and 2010

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Only 10 out of 337 metropolitan areas added construction jobs between February 2009 and 2010, the Associated General Contractors of America reports citing data from the U.S. Bureau of Labor Statistics.

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Even worse, 230 metro areas experienced double digit declines in construction employment while only two cities experienced a double digit increase, association officials noted.

“In virtually every area, construction workers continued to suffer the brunt of the recession,” says Ken Simonson, the association’s chief economist. “Job losses in far too many cities were simply, and sadly, staggering.”

The construction economist says that Houston, Texas lost more construction jobs (25,500, 13%) than any other metro area between February 2009 and 2010. Monroe, Michigan, meanwhile, lost the highest percentage of construction jobs (41%, 900 jobs). Other areas experiencing a high number of job losses include Chicago, Illinois (25,200, 20%); Los Angeles, California (23,000, 19%); Las Vegas, Nevada (22,900, 31%); and Phoenix, Arizona (20,600, 20%).

Among the 10 metro areas adding construction jobs during the past 12 months (12 metro areas experienced no change in employment), three added only 100 jobs (Ithaca, New York; Grand Forks, North Dakota; and Bismarck, North Dakota). Eau Claire, Wisconsin added more jobs and a higher percent of jobs than any other city in America (600, 29%). Other areas adding jobs include El Paso, Texas (400, 3%); Haverhill-North Andover-Amesbury, Massachusetts-New Hampshire (300, 9%); Syracuse, New York (300, 3%); and Lafayette, Louisiana (200, 3%).

Simonson notes that the industry continues to suffer from weak demand for new construction activity. Annual construction spending declined to an eight-year low in February. He says that single-family homebuilding and the federal stimulus should help boost construction employment in a number of metro areas this spring, but high vacancy rates and shrinking state and local budgets will keep construction employment from rising in most areas.

In addition to low spending levels, association officials cautioned that federal and state regulatory and spending decisions were having an impact on the industry. They cite confusion about the impact of the health care legislation, unfunded mandates in California and New York forcing contractors to retrofit or replace current equipment, and infrastructure spending cuts in states like New York and Florida.

Meanwhile, federal employment figures released recently showed that payroll employment in the construction industry in March rose by 15,000, seasonally adjusted, the first gain since June 2007. The AGC hailed the increase, but cautioned it may not be sustained.

“This upturn was shared among all three nonresidential categories—building construction, specialty trade contractors, and heavy and civil engineering construction,” says Simonson. “But both nonresidential and residential construction employment remain lower than in January, suggesting some of the pickup may have been a short-term rebound from exceptionally severe weather in February.” Simonson notes that the industry’s unemployment rate, which is not seasonally adjusted, dropped slightly from 27.1% in February to 24.9% in March, but remained more than double the all-industry level.

“The persistence of depression-like unemployment in construction is ominous for an industry that already faced challenges retaining and attracting skilled crafts workers and supervisors,” he says.

Simonson points out that the industry continues to outpace the overall economy in wage rates. Hourly earnings for all workers in construction in March averaged $25.27, seasonally adjusted, 12.5% higher than the average for all nonfarm payroll workers. Craft workers averaged $23.18 or 23% more than all production and nonsupervisory workers.

Overall, nonfarm payroll employment climbed in March by 162,000, seasonally adjusted, and the unemployment rate remained for a third straight month at 9.7% (10.2%, not seasonally adjusted), according to the Bureau of Labor statistics. Construction employment rose by 15,000 to 5,592,000; the increase followed a drop of 59,000 in February.

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