Construction employment declined in 276 out of 337 metropolitan areas between July 2009 and July 2010, according to a new analysis of federal employment data released today by the Associated General Contractors of America.
The employment figures demonstrate the widespread decline in demand for construction services that continues to outpace stimulusfunded work, association officials say.
"There is no doubt that we have seen an increase in stimulus activity," says Ken Simonson, the association's chief economist. "Unfortunately, that increase in stimulus activity is largely being overshadowed by continuing declines in overall demand for construction that are likely to persist well into next year."
The ChicagoJolietNaperville area lost more construction jobs (32,900 jobs, 23 percent) than any other metro area, reflecting a construction strike that has since ended. Flagstaff, Ariz., (700 jobs, 32 percent) lost the highest percentage. Other areas experiencing large declines in construction employment included Las Vegas (14,800 jobs, 24 percent); Houston (14,700 jobs, 8 percent); Los AngelesLong BeachGlendale (10,700 jobs, 9 percent); and SeattleBellevueEverett (10,400 jobs, 14 percent).
Simonson notes that 31 metro areas added construction jobs over the past 12 months, while another 30 areas experienced no change in construction employment. Calvert, Charles, and Prince George's counties in Maryland added more construction jobs (2,800, 8 percent) than any other metro area while Eau Claire, Wisc., added the highest percentage (16 percent, 500 jobs). Other areas adding jobs included Kansas City, Kan. (1,700 jobs, 9 percent); Pittsburgh, Penn. (1,500 jobs, 3 percent); Columbus, Ohio (1,000 jobs, 3 percent); and Chattanooga, Tenn. (700 jobs, 8 percent).
Simonson says the impacts of the stimulus can be seen in that many of the construction employment declines metro areas are experiencing were less severe in July than even a month earlier. The yearoveryear construction employment declines in cities like Las Vegas, Houston, and Seattle were less severe than the figures recorded in June, he says. He adds, though, that too few cities were adding construction jobs to have any widespread impact on construction employment.
Stephen Sandherr, the association's CEO, says, "As much as we would hate to see how much worse the construction employment figures would be without the stimulus, the fact is our industry is continuing to suffer even as some areas of the economy have begun to expand. And with regular, longterm infrastructure bills stalled in Congress, it looks like construction workers will have little opportunity to continue rebuilding our economy."
The association reported in August that total construction spending declined to a 10year low of $805 billion in July, as investments in construction projects dropped 1 percent from a downwardly revised June total. Association officials noted that the new figures show depressed private-sector activity, and local and state budget cuts are offsetting stimulusfunded construction spending.
"While the stimulus is funding some vital infrastructure projects, the private sector is too cautious, and state and local governments are too cashstrapped, to help," Simonson says. "As a result, overall construction spending is at its lowest level in a decade, and hundreds of thousands of construction workers are unemployed."
The July total was onethird lower than the highwater mark set in February 2006 and was down by 11 percent in the past 12 months alone, he says. He adds that in the past year, all 12 private nonresidential construction categories and 10 of the 14 public categories declined. Private residential spending in July was 5.5 percent higher than a year earlier, but has dropped for three straight months since the homebuyer tax credit expired in April, Simonson says.
Stimulus funds appear to have buoyed public housing (up 18 percent from July 2009 to July 2010), sewage and waste disposal (up 11 percent), and water supply construction (up 0.7 percent), while reconstruction work around New Orleans helped conservation spending rise 12 percent, Simonson says. He adds, however, that stimulus spending on highways and other transportation facilities was evidently not enough to offset the downturn in state and local budgets, leading these categories to contract by 7 percent and 1 percent, respectively, from yearearlier levels.
Private nonresidential spending plunged 24 percent from July 2009 to July 2010 with doubledigit declines in nearly all categories, Simonson says. Private power construction reached the highest monthly level this year, but manufacturing and developerfinanced categories such as office, hotel, and retail construction appear to be heading for still less activity, he says.