Construction Industry Hits 17.2% Unemployment Rate in September

Some sobering news for the construction industry has just been released. The number of people working in construction is approaching a 14-year low after the industry lost 21,000 jobs in September. The current unemployment rate for the entire industry is at a stunning 17.2% according to an analysis of federal employment figures released by the Associated General Contractors of America.

So how bad is it?

“It has taken less than four years to erase a decade’s worth of job gains as the industry suffers from declining private, state and local construction demand,” says Ken Simonson, the association’s chief economist. “No other sector of the economy has suffered as much for as long as construction.”

Simonson also said that the 5.6 million people working in construction today is barely higher than the 5.59 million people who were working in construction in August 1996. Not much to show for in 14 years.

Most of September’s construction job losses came from the nonresidential sector as demand for commercial facilities and infrastructure projects remains weak. Residential construction lost 2,500 jobs last month while nonresidential construction lost 18,100 jobs. Nonresidential specialty trade contractors were the hardest hit, having lost 19,500 jobs in September.

While federal rollouts have assisted the construction industry, their benefits are basically temporary, and questions remain about when and if construction companies will start hiring again.

“Construction firms aren’t going to start hiring again until they can predict how busy they’ll be,” says Stephen E. Sandherr, the association’s CEO. “Frankly it is hard for contractors to make any business decisions when they don’t know how much they’ll make or how much they’ll owe.”

There was additional bad news in San Diego at the 11th annual survey of owners conducted by the Construction Management Association of America and FMI. According to the survey, America’s construction owners have significantly reduced their in-house design, engineering and construction management staffs during the recession, and don’t expect to return to prior staffing levels for many years, if at all.

This is without question a very difficult time for the construction industry and begs the question, what can the industry do?

Construction Employment in US Near 14-Year Low [California Construction]

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