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Construction Employment Rate Remains Stagnant

7/12/2012 | Construction Blog

The Bureau of Labor Statistics has released its unemployment numbers for June. While the overall picture remains uninspiring, there was a slight bump in construction employment. This increase was driven mostly by an increase in hiring for specialty contractors in the multi-family residential sector.

The unemployment rate in the construction industry decreased from 14.2% in May to 12.8% in June. This represents a net gain of approximately 2,000 jobs in the construction industry in June. The construction unemployment rate in June 2011 was 15.6%.

Ken Simonsen, the chief economist for Associated General Contractors, opined that the numbers do little to change his conclusion that the construction industry remains stagnant. He estimates the number of people to be working in construction nationally to be about 5.5 million, with 750,000 having left the construction workforce for other pursuits since 2010.

The national unemployment rate remains at 8.2%, but the economy appeared stronger in the last quarter. Some associate this slight bump with increased confidence resulting from that news. Anirban Asu, Associated Builders and Contractors’ economist, maintained that the overall unemployment numbers were widely disappointing in June and agreed that the construction industry does not seem to be improving at the moment.

Non-residential construction seems to be struggling the most. Employment in that subset decreased by another 1,000 jobs in June. Heavy and civil engineering construction employment also decreased by 2,000 jobs. Another notable statistic is small growth in the private sector matched by a small loss in jobs in the public sector.

Looking at the larger picture, it seems the recovery in the construction industry is presently stalled. Over 1 million construction workers remain unemployed and when one sector of construction shows some growth another is contracting. This begs the question of whether the reported growth measurements are real or whether chips are simply being moved around on the table.