Construction Employment Edges Higher in May

June 27, 2011
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ARLINGTON, Va. - The U.S. construction industry added 2,000 jobs in May, according to the June 3 employment report by the Bureau of Labor Statistics. Year over year, seasonally adjusted construction employment was unchanged. Nonseasonally adjusted construction unemployment stood at 16.3 percent for the month, down from 17.8 percent in April and 20.1 percent from the same time last year.

Nonresidential building construction added 600 jobs for the month, but has lost 7,200 jobs, or 1.1 percent, year over year, settling at 657,500 jobs in May. The specialty trade contractor sector added 4,300 jobs compared to April, but is down 5,600 jobs, or 0.2 percent, from the same time last year. Heavy and civil engineering construction employment grew by 3,100 jobs in May, for a total of 34,400 jobs added over the last 12 months, a growth of 4.2 percent. Residential building construction employment dropped by 5,900 jobs compared to April and has declined by 21,400 jobs, or 3.7 percent, since May 2010.

Across all nonfarm industries, the nation added a disappointing 54,000 jobs in May, with the private sector adding 83,000 jobs and the government shedding 29,000 jobs for the month. Year over year, the nation has added 870,000 jobs, or 0.7 percent and unemployment remains at 9.1 percent.

“After April’s surprisingly solid employment performance, May’s performance represents bitter disappointment,” said Anirban Basu, Associated Builders and Contractors (ABC) chief economist. “This is not good news for construction. While it is true that nonresidential construction added jobs in May, much of that job growth is a continuation of the economic recovery that had been in place prior to the most recent soft patch. The hope remains that privately financed activities will rebound more forcefully in the months ahead as large numbers of publicly financed stimulus projects move toward a close.

“Economists have known for quite some time that the nation’s economy has been softening in the wake of the crisis in Japan, elevated energy and food prices, and the impact of a housing sector now back in recession,” Basu said. “The response in many industries has been to reduce output and inventory investment - a response that is neatly reflected in many prominent economic indicators. Financial markets have also been trending lower as economists downgrade their collective forecasts for global and national economic growth. Many economists predicted that the nation would add more than 100,000 jobs in May; however, that number turned out to be roughly one-half of the low-end projections.

“Although a privately led recovery simply cannot transpire if the broader economy continues to stall, many of the nation’s leading economists believe that the current soft patch is temporary. There are compelling reasons to believe that they are correct,” Basu said. “Oil prices have been trending lower and eventually the supply chain issues related to the crisis in Japan will abate. That should allow the broader economy to regain a certain degree of momentum by the end of summer. That said, if commodity prices continue to rise, the nation and its construction sector could soon be confronted with a gloomy 2012 forecast.”

Publication date: 06/27/2011

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