Construction employment stagnated in January, ending eight months of recovery from the pandemic-related losses of early 2020, according to an analysis by the Associated General Contractors of America of government data released today. Association officials added that new measures being considered in Congress, including the PRO Act and the National Apprenticeship Act, threaten to undermine the sector’s recovery by disrupting ongoing projects and hampering employers’ ability to train workers.
“The stagnation in construction employment in January may foreshadow further deterioration in the industry as projects that had started before the pandemic finish up and owners hold off on awarding new work,” said Ken Simonson, the association’s chief economist. “With so much of the economy still shut down or operating at reduced levels, it will likely be a long time before many nonresidential contractors are ready to hire again.”
Construction employment dipped by 3,000 to 7,392,000 in January from a downwardly revised December total. Employment in the sector remains 256,000 or 3.3% lower than in February 2020, the most recent peak.
Nonresidential construction has had a much weaker recovery than homebuilding and home improvement construction, Simonson added. While both parts of the industry had huge job losses in early 2020 from the pre-pandemic peak in February to April, residential building and specialty trade contractors have now recouped all of the employment losses they incurred. In contrast, nonresidential construction employment—comprising nonresidential building, specialty trades, and heavy and civil engineering construction—was 259,000 or 5.5% lower in January than in February 2020. Only 60% of the job losses in nonresidential construction had been erased as of last month.
Unemployment in construction soared over the past 12 months. The industry’s unemployment rate in January was 9.4%, compared to 5.4% in January 2020. A total of 938,000 former construction workers were unemployed, up from 515,000 a year earlier. Both figures were the highest for January since 2015.
Association officials warned that the newly-introduced PRO Act would hurt construction workers and demand for future projects by unleashing a new wave of labor unrest that could put a halt to many types of construction projects, even those that are not directly involved in a labor dispute with a union. Meanwhile, the National Apprenticeship Act seeks to deny federal funding to registered apprenticeship programs that are not operated with unions. This would undermine the ability of many firms across the country to train and prepare workers.
“Instead of finding ways to build back better, these new congressional proposals would leave many workers unpaid and untrained while projects languish, unfinished,” said Stephen E. Sandherr, the association’s chief executive officer. “It is hard to see how cutting funding to training programs, undermining workers, and crippling the economy will help put more people back to work in construction or other fields.”
Related Stories
Market Data | Jan 7, 2021
Few construction firms will add workers in 2021 as industry struggles with declining demand, growing number of project delays and cancellations
New industry outlook finds most contractors expect demand for many categories of construction to decline.
Market Data | Jan 5, 2021
Barely one-third of metros add construction jobs in latest 12 months
Dwindling list of project starts forces contractors to lay off workers.
Market Data | Jan 4, 2021
Nonresidential construction spending shrinks further in November
Many commercial projects languish, even while homebuilding soars.
Market Data | Dec 29, 2020
Multifamily transactions drop sharply in 2020, according to special report from Yardi Matrix
Sales completions at end of Q3 were down over 41 percent from the same period a year ago.
Market Data | Dec 28, 2020
New coronavirus recovery measure will provide some needed relief for contractors coping with project cancellations, falling demand
Measure’s modest amount of funding for infrastructure projects and clarification that PPP loans may not be taxed will help offset some of the challenges facing the construction industry.
Market Data | Dec 28, 2020
Construction employment trails pre-pandemic levels in 35 states despite gains in industry jobs from October to November in 31 states
New York and Vermont record worst February-November losses, Virginia has largest pickup.
Market Data | Dec 16, 2020
Architecture billings lose ground in November
The pace of decline during November accelerated from October, posting an Architecture Billings Index (ABI) score of 46.3 from 47.5.
AEC Tech | Dec 8, 2020
COVID-19 affects the industry’s adoption of ConTech in different ways
A new JLL report assesses which tech options got a pandemic “boost.”
Market Data | Dec 7, 2020
Construction sector adds 27,000 jobs in November
Project cancellations, looming PPP tax bill will undercut future job gains.
Market Data | Dec 3, 2020
Only 30% of metro areas add construction jobs in latest 12 months
Widespread project postponements and cancellations force layoffs.