Construction Employment Dropped in March

March construction employment dropped by 7,000, but was still 1% higher than March 2011 construction employment numbers.

The construction industry lost 7,000 jobs between February and March, following a similar decline of 6,000 the month before, but extended a pattern of modest year-over-year job increases, according to an analysis of new federal employment data released by the Associated General Contractors of America. Association officials say that lack of long-term federal highway and transit funding threatens to hold down future job gains.

“Both the small monthly change and the March-to-March gain of 55,000 jobs, or 1%, are consistent with the uneven, tentative recovery that contractors have been reporting nationwide,” says Ken Simonson, the association’s chief economist. He notes that March was the seventh consecutive month that construction employment had risen from the same month a year earlier. “Meanwhile, the industry’s unemployment rate has been dropping faster than the pickup in construction jobs, implying that workers are leaving the industry, which could cause problems later,” he says.

“Multifamily, manufacturing, distribution and energy-related construction are booming,” Simonson observes. “In addition, private hospital and university work are starting to improve, but public construction is declining, while single-family homebuilding, office and retail work are largely limited to remodeling jobs.”

Simonson states the construction unemployment rate in March was 17.2%, or roughly double the national unemployment rate, although the industry rate had improved from 20% in March 2011 and 24.9% in March 2010. “In the past two years, the industry’s unemployment ranks have dropped by more than 800,000,” he says. “That is good news for those who have found jobs, but unfortunately construction firms have not hired most of them. Construction employed the same number of workers—5.55 million—in March 2012 as it did in March 2010. That means construction workers are leaving the industry, either for other jobs or to retire, and contractors may have trouble finding experienced workers in the future.”

Association officials say the pickup in construction jobs is likely to remain anemic and unbalanced unless there is adequate funding for long-term infrastructure programs. They cite the continuing lack of action on a multi-year federal highway and transit bill as a particular problem.

"Just when contractors should be adding workers and getting an early start on the spring construction season, Congress has again left town leaving highway funding on another short-term extension,” says Stephen E. Sandherr, the association’s chief executive officer. “When lawmakers return this month, they should follow through on a bill with enough funding to enable contractors and state agencies to make longer-run plans.”