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State Metro Areas Still Grappling With Construction Unemployment

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While construction employment increased in 149 out of 337 metropolitan areas nationally between June 2010 and June 2011, according to the latest employment data released by the Associated General Contractors of America, cities in California are still grappling with persistent unemployment.

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The AGC says besides the Las Vegas-Paradise, Nev., area, which recorded a loss of 7,000 construction jobs (or -15%) over the past year, the second largest loss occurred in the Los Angeles-Long Beach-Glendale region, with 5,400 job losses (-5%).

In addition, Riverside-San Bernardino-Ontario recorded a loss of 3,900 jobs in the same period (or -6%).

Losing the highest percentage of jobs of any metropolitan area in the country was Redding, with 500 losses (-17%).

“A lot of metro areas appear to be benefitting from growing demand from the private sector for new construction,” said Ken Simonson, the association’s chief economist, in a press release. “Declining public sector demand is clearly taking a toll on just as many metro areas, however.”

Dallas-Plano-Irving, Texas, again added more construction jobs (5,600 jobs, 5%) than any other metro area during the past year while Lake County-Kenosha County, Ill.-Wis., added the highest percentage (20%, 2,600 jobs), according to the federal data.

Simonson said association officials were concerned that the construction industry would continue to suffer more than other sectors from new efforts to cut federal spending. They cited recent measures enacted, or proposed, by Congress that would significantly cut investments in highway, clean water, federal building and flood control construction programs. And they noted that Congress has already allowed $2.5 billion worth of airport construction projects to lapse over an unrelated policy dispute.

Meanwhile, construction employment nationally inched up by 8,000 jobs to a 15-month high in July, but remained far below the peak set in early 2006, according to an AGC analysis of new federal employment data. Association officials said a grim outlook for public sector construction activity will act as a drag on expanding private sector construction. They urged lawmakers to pass adequate long-term funding for public projects, without unnecessary strings attached.

The industry unemployment rate fell from 17.3% a year earlier to 13.6% in July 2011, and the number of unemployed people who previously worked in construction shrank by nearly 400,000. However, Simonson said that the July 2011 employment total of 5,532,000 was only 32,000 higher than in July 2010 and was almost 2.2 million, or 28%, below the record level of April 2006.

“It is encouraging that the construction industry has added 54,000 jobs—or 1 percent—since hitting bottom last January,” Simonson said. “However, unemployed workers are leaving the industry at seven times the rate they are finding jobs in it, which suggests future expansion will be hard to achieve.”

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