AGC's Ken Simonson Gives Input on Recent Jobs Data

The employment report that the Bureau of Labor Statistics released on December 4 contains tentative good news. The unemployment rate fell from 10.2 percent in October to 10 percent in November, seasonally adjusted. Job losses fell to 11,000, the lowest monthly decline since the recession began in December 2007. Even the construction industry showed partial improvement, thought it was likely due to unseasonably warm and dry weather. Seasonally adjusted construction job losses dropped in half, to 27,700. For the first time in more than a year, one of the five construction segments-heavy and civil engineering construction-recorded a monthly gain (5,200 jobs, or 0.6%). However, the overall picture for construction remains dismal. The industry's unemployment rate in November was again the highest of any industry at 19.4 percent, more than double the all-worker average of 9.4 percent, not seasonally adjusted. (Industry rates are not available on a seasonally adjusted basis.) Even the heavy and civil engineering employment gain is suspect, because that segment is particularly sensitive to weather conditions, which may have been milder than usual. Two forward-looking indicators of construction employment are ominous. Architectural and engineering services employment fell again in November, bringing the one-year job loss in that industry to 8.1 percent. If designers are cutting jobs now, there will be fewer projects for contractors to bid on next year. On December 8, Manpower Inc., released its latest quarterly survey of hiring plans for next quarter among 28,000 U.S. employers in 12 sectors. In all four regions of the country, construction had by far the most negative hiring outlook. Between 18 percent and 27 percent of construction firms expect to decrease employment, while only 8 percent to 12 percent expect an increase, for a net employment outlook ranging from -8 percent in the South to -19 percent in the Northeast. In comparison, the all-employment national outlook is for no net change in employment in the first quarter of 2010. Quick enactment of legislation to provide more funding for highways and other public works could add momentum to the one-month rise in heavy and civil engineering construction. But total nonresidential employment is not likely to turn positive until the economy has grown for several quarters. For more information, contact Ken Simonson at (703) 837-5313 or simonsonk@agc.org.