November 2, 2007

Washington, D.C.—“Nonresidential construction employment grew again in October, belying the notion that the housing slump is dragging down all construction,” Ken Simonson, Chief Economist for The Associated General Contractors of America (AGC), said today. Simonson was commenting on the November 2 payroll employment report from the Bureau of Labor Statistics (BLS). “An acceleration of hiring by architects and engineers suggests even better news ahead.

“Although total construction employment fell by 5,000 in October, seasonally adjusted, and 106,000 or 1.4 percent compared to October 2006, all of those losses occurred in homebuilding,” Simonson observed. “The BLS numbers show that over the past 12 months, employment in the three nonresidential categories—nonresidential building, specialty trades, plus heavy and civil engineering—climbed 42,000 or 1 percent,” Simonson commented. “At the same time, employment in residential building and specialty trades dropped by 148,000 jobs or 4.4 percent.

“But that estimate greatly understates the actual difference,” Simonson asserted. “Census Bureau figures for September show residential construction spending was down 16 percent from a year before and nonresidential was up almost 17 percent. It’s likely that residential employment is actually down roughly 16 percent. That means about 400,000 ‘residential’ specialty trade contractors are now doing nonresidential electrical, plumbing and other work.

“If these 400,000 workers are added to the nonresidential total, nonresidential would be up more than 10 percent to its payrolls, outpacing nearly every other industry,” Simonson noted. “That’s much closer to the 17 percent gain in nonresidential construction spending.

“The BLS report shows there is more growth ahead. Architectural and engineering employment rose 3.7 percent in the past 12 months, triple the growth in overall nonfarm employment,” Simonson pointed out. “Their output will turn into construction jobs in the next several months, especially for energy, power and hospital projects.”

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 AGC members are "Building Your Quality of Life.”

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