Construction Jobs Dip Due to Inactive Public Sector

With construction activities recording a drop in various parts of the country, employment in the construction sector, too, seems to have taken a toll.

With construction activities recording a drop in various parts of the country, employment in the construction sector, too, seems to have taken a toll. (Creative Commons)

Constraint on public sector construction funds has reduced construction activities in most metros. A report released by the Associated General Contractors (AGC) of America shows that in 165 out of 337 metropolitan areas construction employment dropped between July 2011 and July 2012. Whereas, increased demand from the private sector gave momentum to the employment activity in 123 metros.

Only in 49 metros the job scene was stable.

“Construction employment is healthy in the handful of areas where private sector demand is on the rebound,” Ken Simonson, the association’s chief economist, said in a press statement. “However, construction employment in most metro areas is suffering from the effects of tepid private sector demand and shrinking public sector construction budgets.”

Job losses were highest in Chicago-Joliet-Naperville, Illinois, and Tampa-St. Petersburg-Clearwater, Florida. Both these areas recorded a loss of 6,500 and 6,100 jobs respectively.

The Californian metros of Bakersfield-Delano and Yuba City added the highest percentage of new construction jobs - 3,200 and 300 jobs respectively, the AGC of America’s report said.

But even with these job losses, nationwide, the construction unemployment rate is at 12.3 percent, lowest since 2008, Terry Phillips, executive director of Allied Construction Industries told The Community Press and Recorder.

However, the threat of another recession could severely dampen the construction employment scene in coming months. Simonson cautions that with economic growth remaining sluggish, there are chances for construction employment to slip further in more places.

“Construction employment will suffer a significant blow if Washington gridlocks its way to another recession,” association’s chief executive officer, Stephen E Sandherr, said in a statement. “Setting our fiscal house in order in a way that provides employers with predictable tax rates while allowing for needed infrastructure investments will boost employment in construction and many other sectors.”