Construction Employment Hits 2-Year High, but Has 17.7 Percent Unemployment Rate

The construction industry added 21,000 jobs in January, as a second consecutive month of unseasonably mild winter weather helped the industry raise employment to a two-year high, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials cautioned that the gains remain fragile amid declining public sector investments in construction and infrastructure.

“Although it’s great news that the industry has added 52,000 jobs in the past two months, the unemployment rate in construction is still double that of the overall economy, and construction employment remains at 1996 levels,” said Ken Simonson, the association’s chief economist. “It will take another month or two to see if the recent job growth reflects a sustained pickup or merely acceleration of homebuilding and highway projects that normally halt when the ground freezes in December and January.”

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Total construction employment now stands at 5,572,000, or 0.4 percent higher than a month earlier, and 116,000 (21 percent) higher than in January 2011 – which was an exceptionally cold and snowy month in many regions, the economist said. He added that construction employment is still 28 percent below its peak level of 7,726,000 in April 2006 and is no higher than in August 1996.

The industry’s unemployment rate in January was 17.7 percent, not seasonally adjusted, Simonson noted.

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The rate was down from 22.5 percent a year earlier but still double the all-industry rate of 8.8 percent (8.5 percent, seasonally adjusted).  Job gains occurred at similar rates across the major construction segments in the past year, Simonson commented. Heavy and civil engineering construction employment grew by 2.6 percent or 21,000 jobs from January 2011 to last month. Nonresidential building and specialty trade contractors increased their combined employment by 2.0 percent (17,000 jobs), while employment among residential building and specialty trade contractors rose by 2.1 percent (41,000 jobs), he said.

Association officials said the across-the-board increase in construction jobs was heartening, but they were concerned that failure to enact highway and other infrastructure funding in Washington would drag down employment, especially in heavy and civil engineering construction.

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“While it is encouraging to see some recent progress on aviation and surface transportation measures, it is vital that Congress and the White House make passing key infrastructure and pro-growth measures a top priority,” said Stephen E. Sandherr, the association’s chief executive officer. “Without adequate long-term funding for infrastructure, competitive tax rates and fewer costly regulatory hurdles, the construction industry may lose many of the jobs it has gained in the past year.”