Nonresidential specialty trade contractors suffer largest job losses in January

The construction unemployment rate jumped to 22.5 percent in January 2011 as the sector lost another 32,000 jobs since December 2010, according to an analysis of new federal employment data released Feb. 4 by the Associated General Contractors of America, Arlington, Va. The new data underscores the challenges facing the industry as the stimulus winds down and demand for private and public construction remains weak, association officials noted.

The industry’s job losses came from the nonresidential construction sector, which lost 35,300 jobs between December and January, while the residential sector added 3,500 jobs, according to the AGC release. Nonresidential specialty trade contractors were hardest hit, losing 21,000 jobs. Meanwhile, winter weather and stimulus wind-downs likely helped drive down heavy and civil engineering construction employment by 7,000 jobs.

“With stimulus work starting to dry up, Congress proposing major funding cuts and private demand still weak, it is hard to see how the industry will add jobs this year,” said Ken Simonson, the association’s chief economist, in the release.

While harsh winter weather likely contributed to some of the industry layoffs in January, the industry has lost 130,000 jobs over the past 12 months even as total private sector employment has increased by nearly 1.3 million, Simonson noted. He added that the fact the construction industry’s unemployment rate continued to be more than twice the overall rate had much more to do with economic conditions than the weather.

Association officials said that construction employment is likely to stagnate through much of 2011 as stimulus funds dry up and public and private sector demand for construction remains weak. They added that proposals in Congress to cut investments in infrastructure, including a proposed 17 percent cut to transportation funding for this year, would only make the construction employment situation worse.