ARLINGTON, VA-Construction employment remains a mixed bag when it comes to recovery, according to Associated General Contractors of America analyses of US Labor Department data. Both a majority of states and a majority of metro areas posted year-over-year gains for July, but few have surpassed their pre-recession peaks, the locally based association said in two separate reports this week.

At the state level, construction employment rose Y-O-Y in 37 states, the largest number since early last year. However, AGC chief economist Ken Simonson says only two states posted figures greater than what they experienced prior to the downturn, and only about one-third of the states posted increases from June to July.

The tallies of Y-O-Y gains and monthly losses were consistent with national totals for July, Simonson notes. Labor Department data released earlier this month showed construction employment rose 3% between July 2012 and last month, but slipped 0.1% between June and July. He calls the recovery “fragile and fragmentary.”

When it comes to metro areas, 201 of the 339 metro areas with construction employment data posted Y-O-Y gains, the largest number since March of last year, according to AGC data released Friday. “But construction employment is at an all-time July high in only 19 of those areas,” says Simonson.

At the other end of the spectrum, he adds, construction employment declined in 90 metros in the past 12 months, “and 28 areas have lost at least half of the construction employees they once had.” Construction employment was stable in the past year in 48 metro areas, according to AGC.

Given the development boom under way there, it's unsurprising that the Houston-Sugar Land-Baytown, TX metro area added the largest number of construction jobs by far over the past year: 13,000, for a gain of 7%. Next were Boston-Cambridge-Quincy, MA, with a Y-O-Y increase of 8,400 jobs and 15%; and Phoenix-Mesa-Glendale, AZ, which also added 8,400 jobs, a 9% increase.

Conversely, however, the Phoenix metro area has also withstood the biggest loss of construction jobs since its peak: down 86,500 jobs and 47% from its highest July reading, which was recorded in 2006. The decline in the Las Vegas metro area has been even more precipitous on a percentage basis, with the 73,900 jobs lost since July '06 representing a 67% drop. The biggest Y-O-Y decline was seen in Riverside-San Bernardino-Ontario, CA, which lost 6,000 jobs for a 9% drop in the past 12 months.

In metro areas such as Vegas and Phoenix, the heavy job losses and sustained downturn in construction have led to attrition in the sector, with many unemployed workers either retiring or switching industries. That has implications for the availability of skilled labor should demand pick up.

“While the industry's recovery has been tentative and remains very fragile, any jump in demand would be as challenging for firms as it would be welcome,” says AGC CEO Stephen E. Sandherr. “The biggest question for many firms is whether there will be enough skilled workers available if things heat up.”

Instant Insights /

Construction Jobs Gain Y-O-Y, But Demand Stays Spotty

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