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Submitted by cdp-inc on January 8, 2021 - 11:41am

According to data released today by the US Bureau of Labor Statistics, the national construction industry added 51,000 jobs on net in December.

Key Takeaways

Press Release from Associated Builders and Contractors, Inc (ABC)

A Bright Spot in Today’s Jobs Report: Nonresidential Construction Adds Jobs in December, Says ABC

WASHINGTON, Jan. 8—The construction industry added 51,000 net new jobs in December, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. During the last eight months, the industry has added 857,000 jobs, recovering 79.1% of the jobs lost during the earlier stages of the pandemic.

Nonresidential construction employment added 29,000 net jobs in December. Nonresidential building was the only subsegment that experienced a net loss in jobs, contracting by 4,300 positions. Nonresidential specialty trade contractors added 18,300 jobs for the month, while heavy and civil engineering added 15,000.

The construction unemployment rate rose to 9.6% in December from 7.3% in November and is up 4.6 percentage points from the same time last year. Unemployment across all industries remained unchanged at 6.7%.

“The case can be made that the U.S. economy is back in recession,” said ABC Chief Economist Anirban Basu. “Retail sales began to slip in October, and according to today’s release, the nation is now losing jobs. With significant segments of the economy still completely or partially shut down, the likelihood is that further jobs losses are forthcoming.

“Given the estimate that the nation lost 140,000 jobs, nonresidential construction’s performance looks brilliant,” said Basu. “Indeed, during much of the pandemic period, nonresidential construction has represented a relative bulwark of stability, buoyed by its frequent status as an essential industry and a large backlog coming into the crisis. December was no exception, with the segment adding 29,000 jobs during the month.”

“One of the brightest aspects of the employment report is the growth in jobs in heavy/civil engineering and among nonresidential specialty trade contractors,” said Basu. “Job growth in heavy engineering suggests that infrastructure spending continues to be an economic stabilizer as the pandemic lingers. ABC’s Construction Backlog Indicator survey shows that the infrastructure segment has held up reasonably well throughout the recession. The growth among nonresidential specialty trade contractors may be an indication that many building owners are using the absence of office workers and visitors to modernize structures, keeping many construction firms, including smaller contractors, busier than they otherwise would be.

“The expectation remains that as vaccination proceeds, the U.S. economy is poised for a significant uptick in growth during the latter half of 2021,” said Basu. “That will set the stage for improving industry performance in 2022 and beyond, particularly if the new administration is able to push forward an aggressive infrastructure stimulus package.”

Press Release from Associated General Contractors of America (AGC)

Construction Sector Adds 51,000 Jobs In December, But Gains Are Likely Temporary As New Industry Survey Finds Widespread Pessimism For 2021

Few Construction Firms Expect the Industry to Recover to Pre-Pandemic Levels Anytime Soon, While Demand for Most Types of Projects is Likely to Fall amid Growing Project Delays and Cancellations

Construction employment increased by 51,000 jobs in December, with gains for nonresidential as well as residential contractors, according to an analysis by the Associated General Contractors of America of government data released today. Association officials cautioned, however, that its latest survey shows widespread pessimism among contractors about the volume of work available in 2021, and they urged lawmakers to focus on measures designed to rebuild the economy and demand for construction.

“December’s employment gains likely reflect milder weather than usual for the month rather than sustained demand for projects,” said Ken Simonson, the association’s chief economist. “In fact, our survey found contractors expect the volume of work is likely to decline for nearly all nonresidential project types, and most firms have experienced project cancellations or postponements.”

Construction employment climbed to 7,413,000 in December, an increase of 0.7 percent compared to November. However, employment in the sector remains down by 226,000 or 3.0 percent since the most recent peak in February.

Residential construction has weathered the pandemic much better than nonresidential segments, Simonson added. While both parts of the industry had huge job losses from the pre-pandemic peak in February to April, residential building and specialty trade contractors have now recouped all of the employment losses they incurred. In contrast, nonresidential construction employment—comprising nonresidential building, specialty trades, and heavy and civil engineering construction—was 241,000 lower in December than in February.

Unemployment in construction nearly doubled in 2020. The industry’s unemployment rate in December was 9.6 percent, compared to 5.0 percent in December 2019. A total of 930,000 former construction workers were unemployed, up from 489,000 a year earlier. Both figures were the highest for December since 2013.

The association’s 2021 Construction Hiring and Business Outlook Survey found that 78 percent of contractors reported a project had been canceled or postponed, while only 25 percent reported winning new or additional work as a result of the pandemic, the economist noted. He said that suggests many firms will have to lay off employees once current projects wrap up. The survey included responses from more than 1,300 contractors that perform all types of construction other than homebuilding.

Association officials urged the new Congress and incoming Biden administration to enact measures to boost investments in all manner of public infrastructure. They added that Washington needs to backfill depleted state and local construction budgets so those new federal infrastructure investments can be more effective in boosting demand and construction employment.

“As Washington officials pivot from providing pandemic relief to focusing on rebuilding the economy, infrastructure needs to be at the top of their agenda,” said Stephen E. Sandherr, the association’s chief executive officer. “There is a real chance to come out of the pandemic with a stronger and more efficient economy if we can act now to rebuild aging and over-burdened infrastructure.”