The nation’s nonresidential building construction job market declined for the second straight month losing 4,100 jobs in October, according to the November 7 employment report released by the U.S. Labor Department. Employment in nonresidential construction now stands at 769,200. Since October 2007, nonresidential building construction has lost 38,200 jobs, or 4.7 percent. Meanwhile, the residential building construction job market continues to post larger declines with 8,100 jobs lost in October 2008, and 118,800 jobs, or 12.4 percent, lost since October 2007. Residential employment is at 813,700 (see graph below).
Total private construction employment, which includes specialty trade contractors, and accounts for 7,069,000 jobs nationally, fell by 49,000 jobs in October and is down by 508,000 jobs since October 2007, a 6.7 percent decline. The last time the nation lost this many construction jobs on a year-over-year basis was July 1991, when job losses stood at 522,000 and the economy was operating at recessionary levels.
Overall, national employment declined by 240,000 jobs in October, following a revised 284,000 jobs lost in September. The nation’s unemployment rate is now up to 6.5 percent in October – the lowest since March 1994.
What This Means
"Any observer who was unconvinced that the U.S. economy has entered a period of recession will undoubtedly be persuaded by the October job numbers, which fell well short of already lowered expectations," said Anirban Basu, Associated Builders and Contractors (ABC) Chief Economist. "The national economy is now feeling the full force of the financial crisis that peaked in September, and is now causing collateral damage in every region of the nation and in virtually every industry.
"Until a new regulatory environment is established, and until confidence is restored in the overall economy, financiers will stay on the sidelines further dampening economic performance," added Basu. "The balance of 2008 will represent a period weaker than any experienced in decades, and 2009 does not look any better.
"The broader economic weakness of the U.S. economy is increasingly penetrating the nonresidential construction industry," said Basu. "However, there is discussion in Washington of an even bigger economic stimulus package than was implemented earlier this year, and it may include a meaningful infrastructure investment component, which would eventually stimulate the construction industry’s expansion and job growth," continued Basu. "Still, it is unclear whether this sweeping legislation can be organized during the upcoming lame duck session of Congress, or whether the next stimulus package will be forged by the next Congress."