Construction Industry Slowly Building From Breakdown?

The construction industry lost 7,000 jobs in March, following a similar decline of 6,000 jobs in February, inching the unemployment rate up to 17.2 percent, according to the April 6, 2012, Department of Labor employment report.

However, while the setback is bad news, in context, it isn’t as bad as it may seem.

Compared to the March 2011 rate of 20 percent, construction industry unemployment is down overall. Counting the recent decline, the industry added 55,000 jobs over the past 12 months. The unemployment rate also is much improved from March 2010, when it soared to 24.9 percent. However, persistently high unemployment is frustrating for an industry that has taken the brunt of the country’s economic woes.

To provide contrast with construction, across all industries, the United States added 120,000 jobs in March. Over the past year, the United States has added 1,899,000 jobs, a growth of 1.5 percent growth. The national unemployment rate stood at 8.2 percent in March, down from 8.3 percent in February. The unemployment rate in the construction industry is still more than twice as bad as the national average.

Economists are puzzled about the jump in February and March after a year of modest growth. The nonresidential construction sector lost 6,000 jobs in March, but year against year, it added 7,000 jobs. Residential construction lost 5,000 jobs for the month but added 3,000 jobs during the past 12 months.

“Both the small monthly change and the March-to-March gain of 55,000 jobs or 1 percent are consistent with the uneven, tentative recovery that contractors have been reporting nationwide,” said Ken Simonson, the association’s chief economist for the Associated General Contractors of America (AGC).

Simonson noted that March was the seventh consecutive month that construction employment had risen from the same month a year earlier. The AGC is concerned personnel are leaving the industry, which, combined with the impending mass exodus of baby boomers, could leave the industry with a deficit of experienced workers.

“In the past two years, the industry’s unemployment ranks have dropped by more than 800,000,” he said. “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.”

About the Author

Timothy Johnson

Timothy Johnson is editor—digital for ELECTRICAL CONTRACTOR magazine. Reach him at

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