"Employment in nonresidential building construction continues to slump, a reflection of the fact that momentum in the broader economy has yet to meaningfully impact many segments of America’s nonresidential building construction industry." —ABC Chief Economist Anirban Basu.
Construction employment continues to slump as the nonresidential building construction sector lost 4,300 jobs in June, according to the July 2 report by the Department of Labor. For the second quarter, the nonresidential building sector gained 1,000 jobs. However, on a year-over-year basis, the sector has lost 44,900 jobs, or 6.2 percent, and employment now stands at 681,600.
Feeling the brunt was the nonresidential specialty trade contractor sector which lost 13,000 jobs in June and shed 22,100 jobs in the second quarter. From June 2009, nonresidential specialty trade contractor employment is down 234,200 jobs, or 10.6 percent. In contrast, the heavy and civil engineering sector gained 1,300 jobs for the month and 2,300 jobs for the quarter. However, the sector has lost 38,200 jobs, or 4.5 percent, since last June.
The residential building construction sector lost 1,500 jobs in June, and shed 2,700 jobs in the second quarter, and 51,100 jobs, or 8 percent, from the same time last year. Overall, construction industry employment decreased by 22,000 jobs in June and lost 30,000 jobs over the second quarter. Year-over-year, the construction industry has lost 447,000 jobs, or 7.4 percent. The June construction unemployment rate was 20.1 percent on a non-seasonally adjusted basis, unchanged from last month, but up from the 17.4 percent rate experienced the same time last year.
Total employment, both private and public, in the nation is down 125,000 jobs for the month as the temporary Census workforce decreased by 225,000 jobs. Total employment for the second quarter was up 621,000, but is down 170,000, or 0.1 percent, from the same time last year. Total private employment was up 83,000 jobs in June and up 357,000 jobs for the second quarter. However, on a year-over-year basis, total private employment was down 375,000 jobs or 0.3 percent. Meanwhile, the national unemployment rate was 9.5 percent in June, the lowest since July 2009.
Analysis
“Many economists will be scrambling to interpret today’s employment release,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “It is in many ways the mirror image of last month’s initial jobs release, which reflected an overall gain in jobs largely because the federal government created a large number of temporary Census positions.
“Even interpreting June’s unemployment figures is difficult since the declining unemployment rate, in conjunction with overall establishment job loss, suggests that many who could join the U.S. labor force continue to sit on the sidelines,” said Basu. “The fact is that when people stop looking for work they are no longer counted as unemployed.
“For those of us who work in the area of construction economics, the report is a bit less difficult to interpret and to label. However, it is clear that this represents another disappointing jobs report,” Basu said. “Specifically, employment in nonresidential building construction continues to slump, a reflection of the fact that momentum in the broader economy has yet to meaningfully impact many segments of America’s nonresidential building construction industry. This is particularly true for privately financed segments, where a lack of momentum was also reflected in the July 1 data regarding construction spending.
“Nonetheless, hope remains that broader economic recovery will continue and eventually lift privately financed construction levels before the impact of the stimulus begins to fade. Unfortunately, it appears that the lack of momentum in the construction industry is a reflection of what appears to be happening now in the U.S. economy,” said Basu.
