Construction employment rose by 8,000 jobs in July, hitting a 15-month high, according to the Associated General Contractors of America (AGC). But the Arlington, Va., trade group issued a “grim outlook” for public sector construction activity, which it said will “act as a drag on expanding private sector construction.” AGC officials want Congress to pass long-term funding for public projects.
The industry unemployment rate fell from 17.3%, a year earlier to 13.6% in July 2011, and the number of unemployed people who previously worked in construction shrank by nearly 400,000, said Ken Simonson, the association’s chief economist. However, Simonson noted that the July 2011 employment total of 5,532,000 was only 32,000 higher than in July 2010 and was almost 2.2 million, or 28%, below the record level of April 2006.
“It is encouraging that the construction industry has added 54,000 jobs, or 1%, since hitting bottom last January,” Simonson said. “However, unemployed workers are leaving the industry at seven times the rate they are finding jobs in it, which suggests future expansion will be hard to achieve.”
The construction economist noted that employment in heavy and civil engineering construction -- the segment that had previously added jobs as a result of federal funding for stimulus, military base realignment and Gulf Coast hurricane protection projects -- shrank for the third month in a row, by 400 jobs. Residential building and specialty trade employment dropped a combined 1,600 jobs in July. Nonresidential building and specialty trade contractors added a combined 10,200 jobs for the month.
“The shift in employment from heavy projects such as highways, military bases and levees to factories, power projects and hospitals will continue as government spending shrinks and the private sector gradually expands,” Simonson predicted. “But overall job creation will remain sluggish at best unless single-family home building also revives.”