"The economic slowdown during the spring and summer of last year caused many projects to be put on hold and resulted in diminished construction momentum." —ABC Chief Economist Anirban Basu.
The construction industry lost 7,000 jobs in March, inching the unemployment rate up to 17.2 percent from 17.1 percent in February, according to the April 6 Department of Labor employment report. Year over year, construction industry unemployment is down compared to the March 2011 rate of 20 percent. The industry added 55,000 jobs over the past 12 months.
The nonresidential construction sector lost 6,000 jobs for the month, but year over year has added 7,000 jobs, or 1.1 percent, bringing the total number of jobs to 659,400. Residential construction lost 5,000 jobs for the month and has added 3,000 jobs during the past 12 months, or 0.4 percent, to reach 569,000 jobs.
Nonresidential specialty trade contractors shed 5,000 jobs in March, while residential specialty trade contractors added 5,000 jobs and heavy and civil engineering construction employment saw a gain of 4,000 jobs. Year over year, nonresidential specialty trade contractors have lost 4,000 jobs, or 0.2 percent; residential specialty trade contractor employment grew by 29,000 jobs, or 2 percent; and heavy and civil engineering construction employment increased by 20,000 jobs, or 2.4 percent.
Across all industries, the nation added 120,000 jobs in March. The private sector expanded by 121,000 jobs and the public sector shrank by 1,000 jobs. On a yearly basis, the nation has added 1,899,000 jobs, or 1.5 percent. The national unemployment rate stood at 8.2 percent in March, down from 8.3 percent in February, with the labor force shrinking by 164,000 people.
Analysis
“Today’s employment report was disappointing, particularly for construction,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “The first quarter of 2012 will be judged as a step backward for the industry as construction spending levels stagnated and employment momentum disappeared.
“A certain level of weakness was anticipated due to the economic slowdown during the spring and summer of last year that caused many projects to be put on hold and resulted in diminished construction momentum,” Basu said. “In addition, ABC’s Construction Backlog Indicator, a predictor of construction activity, dipped during last year’s fourth quarter, setting the stage for the declines in construction employment now being observed.
“This employment report differed from the prior three months because employment growth was disappointing for the broader economy as well,” Basu said. “The consensus coming into today’s release was the nation would have added approximately 200,000 jobs in March, which did not happen.
“Some attribute the disappointing March report to abnormally warm weather across the nation, which caused February’s employment to be artificially high. However, one month does not make a trend and other data remain upbeat, including consumer activity and overall economic momentum. Economists and others will be looking for signs of improvement in labor market dynamics in April,” Basu said.