U.S. Construction Employment Rising, for Now

The temporary restoration of FAA jobs isn't part of July's welcome gain of 8,000 jobs, but the Associated General Contractors of America warns that workers leaving the industry are going to constrain growth.

Quick passage Aug. 5 of a bill in the U.S. Senate means about 4,000 Federal Avaiation Administration workers are going back to the work and will be paid, although the reauthorization battle overhanging the agency will be rejoined by Congress in mid-September. Several airport construction projects halted for two weeks also can resume.

The Aug. 5 weekly employment report showed construction employment rose by 8,000 jobs to a 15-month high in July, but it is "far below the peak set in early 2006," the Associated General Contractors of America noted as its leaders again called for long-term federal funding for public projects.

The construction industry's unemployment rate fell from 17.3 percent one year earlier to 13.6 percent in July 2011, and the number of unemployed people who previously worked in construction shrank by nearly 400,000, said Ken Simonson, AGC's chief economist. He said the July 2011 employment total of 5,532,000 was almost 2.2 million, or 28 percent, below the April 2006 record level.

On June 8, Associated Builders and Contractors Chief Economist Anirban Basu said the segments of the construction industry likely to grow for the next year were "health care, which is the construction of hospitals, health centers and clinics, and the natural resources sector, which is in reaction to the growing cost of energy."

"It is encouraging that the construction industry has added 54,000 jobs -— or 1 percent -— since hitting bottom last January," Simonson said in AGC's Aug. 5 news release. "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." He said heavy and civil engineering construction employment declined slightly but was 21,000 higher than a year earlier. Residential building and specialty trade employment declined in July, while nonresidential building and specialty trade contractors added 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," he said, "but overall job creation will remain sluggish at best unless single-family home building also revives."

"Congress and the administration must avoid a repeat of the needless, harmful shutdown that we have just experienced with airport construction projects," said Stephen E. Sandherr, the association's chief executive officer. "The last thing our economy needs is more self-inflicted wounds that leave tens of thousands needlessly unemployed."

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