Construction Employment Declines Due to Winter Weather

Construction 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.

“Given the variability of weather, especially in winter, the downturn in December is not cause for alarm,” said Ken Simonson, the association’s chief economist. “The data does show how uneven the recovery remains with residential construction doing very well, but the public sector remains weak and private nonresidential construction is mixed.”  

Construction employment totaled 5,833,000 in December, an increase of 122,000 from a year earlier, Simonson noted.   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 4,800 jobs, the most new jobs during the past month.

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 report having 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.

“If the economy continues to expand and Washington can work together to make needed infrastructure investments, firms should be able to add significantly more jobs in 2014,” said Stephen E. Sandherr, the association's chief executive officer. “But Congress and the administration need to set aside partisan differences and find a way to work together in the interest of our economy.”