Ken Simonson, chief economist for the Associated General Contractors of America.

ARLINGTON, Va. - According to a release issued by the Associated General Contractors of America (AGC), construction employment declined in 324 out of 337 metropolitan areas over the past year as spending on construction projects dropped by over $137 billion in November to a six-year low of $900 billion, based on federal figures released in early January.

“Private, nonresidential construction is in freefall, with every category except private power construction down sharply compared to a year ago,” said Ken Simonson, the association’s chief economist. “Those cuts are causing layoffs in virtually every part of the country for tens of thousands of skilled construction workers.”

Simonson noted new Census Bureau figures released about the same time show developer-financed construction suffering the largest decline in spending between Nov. 2008 and Nov. 2009. He also pointed out that private lodging investments were down 46 percent; retail, warehouse, and farm spending were down 41 percent; and private office construction investments were down 39 percent. According to Simonson, a recovery in homebuilding may spark some improvement in retail construction later this year, and higher education and hospital construction may come back in the second half of 2010.

Simonson also noted that public construction benefitted from federal stimulus funds, with a year-over-year increase of 2.7 percent. He predicted, however, those gains will continue to be tempered by sharp cutbacks in projects funded directly by states, local governments, and school systems.

The declines in investments are leading to sweeping industry layoffs, according to Simonson. El Centro, Calif., lost a larger percentage of its construction work force (36 percent) from Nov. 2008 to Nov. 2009 than any other metropolitan area according to the latest Bureau of Labor Statistics figures. The agency includes mining and logging with construction in most metro areas to prevent disclosure about industries with few employees, he noted.

Other areas experiencing sharp declines in construction employment during the year include Kokomo, Ind., 31 percent; Wenatchee-East Wenatchee, Wash. and Reno, Nev., both 28 percent; and St. George, Utah and Grand Junction, Colo., both 27 percent.

Of the six metropolitan areas with an increase in construction employment during the past 12 months, only two areas had gains of more than 100 jobs: Harrisburg-Carlisle, Pa., 1,500 jobs, 12 percent gain; and Tulsa, Okla., 700 jobs, 3 percent gain. Four metro areas had gains of 100 jobs each in construction: Anderson, Ind., 6 percent; Columbus, Ind., 5 percent; Bismarck, N.D., 3 percent; and Fargo, N.D., including nearby areas in Minnesota, 1 percent.

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Publication date:01/18/2010