Construction employment rebounded by 464,000 jobs in May, but the total remained 596,000 below the latest peak in February and the industry’s 12.7 percent unemployment rate was the highest for May since 2012, according to an analysis by the Associated General Contractors of America of government data released today. Association officials cautioned that the future job losses are likely as temporary federal support programs end, state and local officials deal with tighter budgets and private sector demand declines later this year.
“The huge pickup in construction employment in May is good news and probably reflects the industry’s widespread receipt of Paycheck Protection Program loans and the loosening of restrictions on business activity in some states,” said Ken Simonson, the association’s chief economist. “Nevertheless, the industry remains far short of full employment, and more layoffs may be imminent.
Simonson noted that the association’s latest survey found that nearly one-fourth of contractors reported a project that was scheduled to start in June or later had been canceled. He added that with most states and localities starting a new fiscal year on July 1, even more public construction is likely to be canceled unless the federal government makes up for some of their lost revenue and unbudgeted expenses.
The gain of 464,000 jobs in May followed losses of 995,000 in April and 65,000 in March, for a cumulative loss over three months of 596,000. Construction employment totaled 7,043,000 in May, about where it stood in late 2017, the economist noted.
The industry’s unemployment rate in May was 12.7 percent, with 1,187,000 former construction workers idled. These figures were roughly four times as high as in May 2019 and were the highest May levels since 2012 and 2011, respectively.
Association officials said the best way to avoid the expected future construction job losses is for federal officials to boost funding for infrastructure, including highway, bridges, waterways and airports. They noted that the additional funding would help cover expected state and local budget shortfalls and would help replace expected declines in private-sector demand.
“Government officials have done a good job providing temporary relief for firms struggling to cope with the economic impacts of the pandemic,” said Stephen E. Sandherr, the association’s chief executive officer. “As those temporary supports end, the broader economic realities of the lock-downs will cost countless construction jobs unless Congress and the Administration can work together to enact measures to revive the economy.”
Related Stories
Market Data | Sep 18, 2020
6 must reads for the AEC industry today: September 18, 2020
Sagrada Familia completion date pushed back and energy code appeals could hamper efficiency progress.
Market Data | Sep 17, 2020
6 must reads for the AEC industry today: September 17, 2020
Foster + Partners-designed hospital begins construction in Cairo and heat pumps are the future for hot water.
Market Data | Sep 16, 2020
6 must reads for the AEC industry today: September 16, 2020
REI sells unused HQ building and Adjaye Associates will design The Africa Institute.
Market Data | Sep 15, 2020
7 must reads for the AEC industry today: September 15, 2020
Energy efficiency considerations for operating buildings during a pandemic and is there really a glass box paradox?
Market Data | Sep 14, 2020
6 must reads for the AEC industry today: September 14, 2020
63% of New York's restaurants could be gone by 2021 and new weapons in the apartment amenities arms race.
Market Data | Sep 11, 2020
5 must reads for the AEC industry today: September 11, 2020
Des Moines University begins construction on new campus and the role of urgent care in easing the oncology journey.
Market Data | Sep 10, 2020
6 must reads for the AEC industry today: September 10, 2020
Taipei's new Performance Hall and Burger King's touchless restaurant designs.
Market Data | Sep 9, 2020
6 must reads for the AEC industry today: September 9, 2020
What will the 'new normal' look like and the AIA hands out its Twenty-five Year Award.
Market Data | Sep 8, 2020
‘New normal’: IAQ, touchless, and higher energy bills?
Not since 9/11 has a single event so severely rocked the foundation of the commercial building industry.
Market Data | Sep 8, 2020
7 must reads for the AEC industry today: September 8, 2020
Google proposes 40-acre redevelopment plan and office buildings should be an essential part of their communities.