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 | Oct 2, 2019
Spending on nonresidential construction takes a step back in August
Office, healthcare, and public safety are among the fastest-growing sectors, according to the U.S. Census Bureau's latest report.
Market Data | Sep 27, 2019
The global hotel construction pipeline ascends to new record highs
With the exception of Latin America, all regions of the globe either continued to set record high pipeline counts or have already settled into topping-out formations amidst concerns of a worldwide economic slowdown.
Market Data | Sep 25, 2019
Senate introduces The School Safety Clearinghouse Act
Legislation would create a federally funded and housed informational resource on safer school designs.
Market Data | Sep 18, 2019
Substantial decline in Architecture Billings
August report suggests greatest weakness in design activity in several years.
Market Data | Sep 17, 2019
ABC’s Construction Backlog Indicator inches lower in July
Backlog in the heavy industrial category increased by 2.3 months and now stands at its highest level in the history of the CBI series.
Market Data | Sep 13, 2019
Spending on megaprojects, already on the rise, could spike hard in the coming years
A new FMI report anticipates that megaprojects will account for one-fifth of annual construction spending within the next decade.
Architects | Sep 11, 2019
Buoyed by construction activity, architect compensation continues to see healthy gains
The latest AIA report breaks down its survey data by 44 positions and 28 metros.
Market Data | Sep 11, 2019
New 2030 Commitment report findings emphasize need for climate action
Profession must double down on efforts to meet 2030 targets.
Market Data | Sep 10, 2019
Apartment buildings and their residents contribute $3.4 trillion to the national economy
New data show how different aspects of the apartment industry positively impact national, state and local economies.
Market Data | Sep 3, 2019
Nonresidential construction spending slips in July 2019, but still surpasses $776 billion
Construction spending declined 0.3% in July, totaling $776 billion on a seasonally adjusted annualized basis.