Employment in construction declined by 16,000 during December 2010 as the industry’s unemployment rate hit 20.7 percent, according to analysis of federal employment figures by the Associated General Contractors of America (AGC). The industry continues to suffer from weak private sector demand, while the benefits of the temporary stimulus program appear to be winding down, association officials noted.

“At this point, it doesn’t look like there’s anything to replace the temporary help that the stimulus has been providing for the construction industry,” said Ken Simonson, the chief economist at AGC. “Today’s figures offer yet another reminder that the construction industry remains, and is likely to remain, the hardest-hit industry in the economy.”

Construction employment declined by 0.3 percent during December, leaving 5.6 million people employed in the industry, a 27 percent decline since employment in the industry peaked in August 2006 at 7.7 million, Simonson noted. During the past 12 months, the construction industry has lost 93,000 jobs, he added. Meanwhile, the industry’s unemployment rate is more than double the overall, not seasonally adjusted, national unemployment rate of 9.1 percent.

Heavy and civil engineering construction, the category most likely to be affected by the stimulus and other temporary federal programs like base realignment, experienced the largest decline within the construction sector, dropping by 12,700 for the month.

Before December and November, that segment of the construction industry had been adding jobs for much of 2010. The decline indicates that stimulus and other temporary federal projects, especially in transportation, have begun winding down, Simonson suggested. He added that unseasonably harsh weather during December probably exacerbated the job decline in heavy construction, which is far more vulnerable than most industries to outdoor conditions.

Publication date:01/17/2011