According to data released today by the US Bureau of Labor Statistics, the national construction industry lost 61,000 jobs on net in February.
Press Release from Associated Builders and Contractors, Inc (ABC)
WASHINGTON, March. 5—The construction industry lost 61,000 jobs on net in February, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. During the last ten months, the industry has added 805,000 jobs, recovering 72.3% of the jobs lost during the earlier stages of the pandemic.
Almost all of the job loss was in nonresidential construction, a segment in which employment declined by 60,800 jobs on net in February. Nonresidential specialty trade contractors and heavy and civil engineering both experienced significant job losses, losing 36,700 and 20,800 jobs, respectively. Nonresidential building lost 3,300 positions.
The construction unemployment rate rose to 9.6% in February and is up 4.1 percentage points from the same time a year ago. Unemployment across all industries dropped slightly from 6.3% in January to 6.2% last month.
“Today’s employment report should not cause alarm among stakeholders in the nonresidential construction industry,” said ABC National Chief Economist Anirban Basu. “In recent months, contractors have become more upbeat regarding industry prospects, as indicated by ABC’s Construction Backlog Indicator, citing rising backlog and expectations for rising employment, sales and even profit margins. While the loss of employment is never pleasant, February data were impacted by weather-related interruptions in the South, which likely resulted in some temporary job loss, but tells us little about fundamental industry dynamics.
“The balance of the economy appears to be outperforming expectations in terms of labor market recovery, and there is now growing evidence that more pervasive vaccinations are beginning to shape economic outcomes for the better,” said Basu. “Stimulus passed by the previous presidential administration has helped to further bulk up consumer spending and there is more stimulus on the way. All of this is consistent with ABC’s long-standing forecast that the second half of 2021 will be spectacular for economic growth.
“Therein lies a potential challenge for contractors: the economy could get too hot during the months ahead,” said Basu. “Already, interest rates are on the rise and inflation expectations are at multi-year highs. A sharp rise in borrowing costs could truncate the duration of the nonresidential construction spending recovery to come, particularly in the context of still-shaky public finances and altered commercial real estate fundamentals. The optimal outcome would be solid growth coupled with moderate inflation, but the economy may end up generating euphoric growth for a time followed by a less supportive environment for construction starts and consistent economic growth. But such concerns are longer-term and speculative.”
Press Release from Associated General Contractors of America (AGC)
Association Officials Urge Congress and Biden Administration to Focus on New Infrastructure Funding, Address Rising Materials Prices and Avoid Disruptive Measures like the PRO Act to Stem Sector Job Losses
Construction employment declined by 61,000 in February, while the sector’s unemployment rate soared to 9.6 percent amid severe winter weather and continuing weakness in new nonresidential projects, according to an analysis by the Associated General Contractors of America of government data released today. Association officials urged Congress and the Biden administration to focus on new infrastructure funding, address rising materials prices and avoid disruptive measures like the PRO Act to stem further construction job losses.
“The steep decline in construction employment in February continues a downward trend in nonresidential activity that began before the disruptions caused by last month’s freezes and power losses,” said Ken Simonson, the association’s chief economist. “Despite recovery in some parts of the economy, private nonresidential construction is still experiencing many canceled and postponed projects and few new starts.”
Construction employment slumped by 61,000 from January to February, the first overall decline since April 2020. Employment totaled 7,340,000, a decrease of 308,000 or 4.0 percent from the most recent peak in February 2020.
The job loss was concentrated in nonresidential construction, with a decline of 60,800 jobs in February, following a dip of 400 jobs in January. The February 2021 total was 316,000 jobs or 6.8 percent less than a year earlier. Only half the jobs lost in the first two months of the pandemic had been regained by February. In the latest month, nonresidential building contractors shed 3,300 jobs and nonresidential specialty trade contractors lost 5,500 workers, while heavy and civil engineering construction firms—the category most likely to be affected by winter storms—lost 20,800 employees.
Residential construction employment—comprising residential building and specialty trade contractors—inched down by 200 jobs in February. But the sector’s employment remained slightly higher than a year ago.
Unemployment in construction soared over the past 12 months. A total of 921,000 former construction workers were unemployed, up from 531,000 a year earlier and the highest for February since 2014. The industry’s unemployment rate in February was 9.6 percent, compared to 5.5 percent in February 2020.
Association officials urged members of Congress to work with the Biden administration to quickly pass needed new infrastructure investments. They also urged the president to take steps to address soaring construction materials prices, including for lumber and steel, by easing tariffs and exploring steps to boost domestic production. They added that Congress should drop plans to impose the PRO Act, which would harm workers and undermine the fragile economic recovery.
“Washington officials can’t change the weather, but they can help boost demand for infrastructure, address spiking steel and lumber prices and avoid anti-recovery measures like the PRO Act,” said Stephen E. Sandherr, the association’s chief executive officer. “Stripping workers of their privacy and denying them the absolute right to secret ballot elections, as the PRO Act does, won’t boost demand for construction or put more people to work.”