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NONRESIDENTIAL CONSTRUCTION JOBS JUMP AS RESIDENTIAL RETREATS, AGC ECONOMIST SAYS

February 2, 2007

Washington, D.C.—“Nonresidential construction jobs jumped in January, while homebuilding employment grew chillier,” Ken Simonson, chief economist for The Associated General Contractors of America (AGC), said today. Simonson was commenting on the January employment report from the Bureau of Labor Statistics (BLS).

“In January, construction accounted for one out of five net new jobs in the entire nonfarm economy—22,000 out of 111,000,” Simonson noted. “Not bad for an industry that constitutes less than six percent of total nonfarm employment.

“Nonresidential construction employment growth has been sizzling,” Simonson continued. “Over the past 12 months, nonresidential building contractors and nonresidential specialty trades have boosted employment by 160,000, or 5.0 percent. Heavy and civil engineering construction has added 25,000, or 2.5 percent. Those rates greatly outstrip the 1.6-percent growth rate for nonfarm payroll employment as a whole.

“A further favorable omen for nonresidential construction is that architectural and engineering employment rose more than five percent in the past year,” Simonson commented. “That should translate into additional construction work in the next several months. I expect several nonresidential categories to do especially well this year—particularly energy and power-related construction, hospitals, hotels and resorts.

“In contrast, residential building and specialty trades employment slipped again in January, bringing the year-over-year decline to 84,000 jobs, or 2.5 percent of the January 2006 total,” Simonson observed. “I expect home builders will continue to shrink for most of 2007, until they see a marked upturn in home sales.”

“Construction wages rose 4.5 percent in the last 12 months, outpacing the 4.0 percent increase for all private industry production workers,” Simonson stated. “Part of this reflects a changing mix of construction jobs, away from lower-skilled homebuilding and remodeling to skilled nonresidential crafts. But it may also indicate that contractors are ratcheting up pay to find the workers they need.

“BLS sharply increased its estimate of total construction employment as part of its normal annual revision process for all industries,” Simonson concluded. “The January 2007 count of 7,715,000, seasonally adjusted, is more than 200,000 higher than appeared likely a month ago.”

NOTE: A podcast discussing the latest construction jobs and spending trends will be available at www.agc.org/podcast.

The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 32,000 firms, including 7,000 of America’s leading general contractors, and over 11,000 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at www.agc.org. AGC members are "Building Your Quality of Life.”

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