Industry’s recovery remains tentative with unemployment at 21.8%
Construction firms added 14,000 new jobs in April, the second consecutive month of employment gains for the industry, according to an analysis of new federal figures released by the Associated General Contractors of America. After more than two years of dramatic job losses, the construction industry is once again adding jobs, thanks primarily to the increasing number of stimulus-funded projects now underway, the association noted.
“As today’s report makes clear, the impacts of the stimulus are now being felt across a much broader section of the construction industry,” said Ken Simonson, the association’s chief economist. “The good news is the stimulus is for now turning the tide on construction employment; the bad news is the stimulus is temporary while the construction downturn will be protracted.”
Simonson noted that the construction industry has added 40,000 new jobs since February. Those increases follow more than three years of employment declines that cost more than 2 million construction workers their jobs. Even after the two months of job growth, the industry’s unemployment rate was 21.8%, more than twice the national average and the highest April rate since the series began in 1976.
The economist said the job growth appears driven by the stimulus, noting that construction firms are reporting a surge in projects funded by the Recovery Act. He added that the nonresidential construction sector, where most stimulus construction funds were targeted, added 24,600 jobs in April and 36,500 jobs in March.
Heavy and civil engineering construction, which includes highway and many public works projects that benefited from the stimulus, alone added 9,000 new jobs last month, the fourth pickup in the past six months.
Simonson cautioned that stimulus funding for construction was likely to end before private-sector and state and local government demand for construction resumes, citing high vacancy rates and declining tax receipts. He said enacting the long-delayed highway and aviation bills, passing the Water Resources Development Act and the Building Star legislation, establishing a Clean Water Trust Fund and National Infrastructure Bank and keeping tax rates unchanged were the best ways to avoid post-stimulus job losses in the construction industry.
“Without long-term federal investment programs in place, construction employment is likely to suffer significant new declines once the stimulus runs its course,” Simonson noted. “The best way to build on today’s momentum is by enacting the long-term investment programs that are crucial to the nation’s continued economic prosperity.”