Construction industry employment declined by 29,000 in March, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. Nonresidential construction employment declined by 24,600 in March.
All three nonresidential segments registered job losses, with the largest decrease experienced in nonresidential building (-10,700) followed closely by heavy and civil engineering (-10,200). Nonresidential specialty trade lost 3,700 jobs on net.
The construction unemployment rate was 6.9% in March, up 1.7 percentage points from the same time one year ago. Unemployment across all industries rose from 3.5% in February to 4.4% last month, a direct result of the global pandemic.
“So ends the lengthiest expansion in American economic history,” said ABC Chief Economist Anirban Basu. “The expansion was associated with dramatic asset price increases, multi-decade lows in unemployment, persistently low costs of capital and a thriving U.S. nonresidential construction sector. While the March jobs report is horrific, ending a 113-month streak of employment gains, it is clear that employment reports in future months are likely to be even worse.
“What remains unclear is the extent to which estimated construction employment declines are due to mandated suspension of projects in Massachusetts, Pennsylvania, California and elsewhere, and how much of this is due to the emergence of recessionary forces,” said Basu. “Generally, nonresidential construction is one of the last segments of the economy to enter recession as contractors continue to work down their collective backlog, which stood at 8.9 months in ABC’s Construction Backlog Indicator. The need for social distancing renders that statistic less pertinent, meaning that nonresidential construction is susceptible to large-scale job losses immediately.
“While the recently passed stimulus package is massive and helps support the payments side of the economy, economic recovery will remain elusive until the COVID-19-engendered crisis is behind us,” said Basu. “While that is obvious, many people are still looking to compare the current crisis to other episodes in American history, including the Great Recession. As a practical matter, this period defies comparison, and must be understood on its own. Based on what is known, the downturn will be vicious. The good news is that this crisis may finally induce policymakers to fashion and implement a long-awaited infrastructure stimulus package.”
Related Stories
Market Data | Apr 8, 2020
6 must reads for the AEC industry today: April 8, 2020
Stantec discusses how hospitals can adapt buildings to address worst-case scenarios and FXCollaborative Architects tells us why cities will survive the pandemic.
Market Data | Apr 7, 2020
7 must reads for the AEC industry today: April 7, 2020
Leo A Daly's Hotel2Hospital prototype takes shape, while the number of delayed projects reaches 2,550 in the U.S. amid coronavirus pandemic.
Market Data | Apr 1, 2020
February’s construction spending decline indicates what’s to come
Private nonresidential spending declined 2% on a monthly basis and is down 0.7% compared to February 2019.
Market Data | Mar 26, 2020
Architects taking action to support COVID-19 response
New AIA task force will offer insights for adapting buildings into healthcare facilities.
Market Data | Mar 26, 2020
Senate coronavirus relief bill's tax and lending provisions will help construction firms, but industry needs additional measures
Construction officials say measure will help firms cope with immediate cash flow crunch, but industry needs compensation for losses.
Market Data | Mar 25, 2020
Engineering and construction materials prices fall for first time in 40 months on coronavirus impacts, IHS Markit says
Survey respondents reported falling prices for five out of the 12 components within the materials and equipment sub-index.
Market Data | Mar 23, 2020
Coronavirus will reshape UAE construction
The impact of the virus has been felt in the UAE, where precautionary measures have been implemented to combat the spread of the virus through social distancing.
Coronavirus | Mar 20, 2020
Pandemic has halted or delayed projects for 28% of contractors
Coronavirus-caused slowdown contrasts with January figures showing a majority of metro areas added construction jobs; Officials note New infrastructure funding and paid family leave fixes are needed.
Market Data | Mar 17, 2020
Construction spending to grow modestly in 2020, predicts JLL’s annual outlook
But the coronavirus has made economic forecasting perilous.