"Because construction is a lagging indicator, construction activity needs to increase before we see the industry’s unemployment rate begin to decrease." —ABC Chief Economist Anirban Basu.
The nation’s construction industry lost jobs for a second straight month, shedding 12,000 jobs in November, according to the Dec. 2 jobs report by the Department of Labor.
During the past twelve months, the construction industry has added 18,000 jobs, or 0.3 percent. The construction unemployment rate slipped from 13.7 percent in October to 13.1 percent in November, and is down from 18.8 percent in November 2010.
Nonresidential building construction employment decreased by 1,200 jobs for the month, but has added 9,900 jobs, or 1.5 percent, from the same time last year. Nonresidential building construction employment currently stands at 668,700 (see graph).
The nonresidential specialty trade contractor subsector lost 3,500 jobs for the month and has lost 9,900 jobs, or 0.5 percent, compared to the same time last year. Heavy and civil engineering construction sector employment fell by 7,000 jobs in November and has shed 2,900 jobs, or 0.3 percent, year-over-year.
Residential construction building employment decreased by 3,000 jobs for the month and has lost 400 jobs, or 0.1 percent, compared to the same time last year. The residential specialty trade contractor subsector added 3,000 jobs in November, partially offsetting losses experienced by nonresidential specialty trade contractors. Year over year, the residential specialty trade contractor subsector has added 20,800 jobs, or 1.4 percent.
Across all industries, the nation added 120,000 jobs as the private sector expanded by 140,000 jobs and government lost 20,000 jobs. The nation has added 1,600,000 jobs or 1.2 percent. The unemployment rate dropped from 9 percent in October to 8.6 percent in November.
Analysis
“Today’s employment release will be heralded by many as a major indication of progress,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Unfortunately, the nation’s nonresidential construction industry is, for the most part, not a participant in this positive dynamic.
“Nonresidential building construction employment slipped again in November, at least partially a reflection of the weakness that overtook the economy earlier this year,” Basu said. “Heavy and civil engineering declined by 7,000 jobs, likely a reflection of the winding down of federal stimulus spending.
“While the nation’s overall unemployment rate is now below 9 percent for the first time since March 2011, the construction industry unemployment rate remains elevated at 13.1 percent,” said Basu.
“Overall, the last 10 weeks have ushered forth a period of remarkably better news regarding the economic recovery,” Basu said. “During portions of the summer, it appeared that the economy was on the brink of recession. Financial markets were chaotic in August. Since that time, consumer spending and business confidence has been on the rise, translating into more robust employment gains.
“However, because construction is a lagging indicator, construction activity needs to increase before we see the industry’s unemployment rate begin to decrease,” said Basu. “According to ABC’s 2012 Construction Economic Forecast, we can only expect to see gradual progress in construction activity next year.”
