Construction employment declines by 16,000, but unemployment rate also declines

Associated General Contractors of AmericaConstruction employment declined by 16,000 in December but the industry unemployment rate fell to 11.4 percent, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that the new employment data was likely impacted by cold weather, but also reflects underlying weakness in the construction sector.

Construction employment totaled 5,833,000 in December, an increase of 122,000 from a year earlier, noted Ken Simonson, the association’s chief economist. But while employment grew by 2.1 percent during the past year, construction employment remains nearly 1.9 million below the sector’s April 2006 peak. Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 13.5 percent in December 2012 to 11.4 percent last month.

Nonresidential construction firms lost 22,900 new jobs in December while residential firms added 6,200 jobs. Nonresidential specialty trade contractors lost 12,900 jobs for the month, the most of any segment, while heavy and civil engineering firms – which are most likely to perform federal construction work – lost 8,800 jobs, the second most. Meanwhile residential building contractors added the most new jobs during the past month, 4,800 jobs.

The number of unemployed construction workers dropped from 1,105,000 in December 2012 to 958,000 in December 2013, a decline of 147,000. Yet the industry added only 122,000 new jobs during the same timeframe. The shrinking pool of available construction workers may be one reason so many firms reporthaving a hard time finding qualified workers, Simonson noted.

Association officials said the outlook for construction could be helped by new investments in infrastructure and other construction programs. They urged Congress to finalize Water Resources Development Act legislation to invest in ports and other waterways. They also said Congress and the administration should work together to find a way to pay for needed repairs to aging roads and bridges before the current transportation legislation expires at the end of September.

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