The construction unemployment rate jumped to 22.5 percent in January 2011 as the sector lost another 32,000 jobs since December 2010, according to an analysis of new federal employment data released by the Associated General Contractors (AGC) of America. The new data underscores the challenges facing the industry as the stimulus winds down and demand for private and public construction remain weak, association officials noted.
“It may be a new year, but the construction industry is still suffering from the same economic conditions that kept its unemployment rate so high last year,” said Ken Simonson, the association’s chief economist.
While harsh winter weather likely contributed to some of the industry layoffs in January, the industry has lost 130,000 jobs over the past 12 months even as total private sector employment has increased by nearly 1.3 million, Simonson said. He added that the fact the construction industry’s unemployment rate continued to be more than twice the overall rate had much more to do with economic conditions than the weather.
The construction economist noted that the industry’s job losses came from the nonresidential construction sector, which lost 35,300 jobs between December and January, while the residential sector added 3,500 jobs. Nonresidential specialty trade contractors were hardest hit, losing 21,000 jobs. Meanwhile, winter weather and stimulus wind-downs likely helped drive down heavy and civil engineering construction employment by 7,000 jobs, Simonson said.
The AGC predicted that construction employment will stagnate through much of 2011 as stimulus funds dry up and public and private sector demand for construction remains weak. It added that proposals in Congress to cut investments in infrastructure, including a proposed 17 percent cut to transportation funding for this year, could make the construction-employment situation worse.