Construction industry unemployment hits 13.7%, 20,000 jobs lost September, October, says AGC of America; increase in transportation investments, backed by Republicans, could help

Lorena Madrigal

ARLINGTON, Virginia , November 4, 2011 (press release) – The construction industry lost 20,000 jobs between September and October as the industry’s unemployment rate hit 13.7 percent, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said the employment drop reflects continued declines in public sector investments. They added that construction employment could benefit from increased transportation investments and other pro-growth measures designed to boost private sector demand.

“Declining public sector demand for construction, combined with slow growth in private sector demand, is keeping construction employment mired in a cycle of small gains followed by small losses,” said Ken Simonson, the association’s chief economist. “Boosting investments in key infrastructure and other projects would certainly help with construction employment while the economy continues to recover.”

Total construction employment now stands at 5,525,000, down nearly 0.4 percent compared to September, the economist said. Meanwhile, construction employment was nearly unchanged for the year, up only 0.2 percent from the 5,512,000 construction workers employed in October 2010. The economist noted that residential construction added 3,700 jobs during the past month, while the nonresidential sector lost 23,300 jobs.

Simonson noted that the industry’s 13.7 percent unemployment rate was an improvement from the 17.3 percent rate of a year earlier but far above the all-industry, not seasonally adjusted rate of 8.5 percent. Given the fact construction employment levels have changed little during the past year, the decline in the industry’s unemployment rate likely reflects the fact many former construction workers are no longer seeking employment in that sector, the economist suggested.

Association officials noted that a majority of the Republican House Conference has signed a letter authored by Reps. Reid Ribble (R-Wis.) and Tom Reed (R-N.Y.) indicating their support for enacting surface transportation legislation at “responsible funding levels.” They added that other measures, like repealing the 3 percent tax withholding mandate, establishing a Clean Water Trust Fund and ending uncertainty about future tax rates were also needed to boost demand for construction.

“Many in the House understand that the best way to jumpstart the private sector while boosting construction employment is to invest in transportation infrastructure,” said Stephen E. Sandherr, the association’s chief executive officer. “Investing in infrastructure, cutting costly mandates and setting consistent tax rates will help get the construction industry back on its feet.”

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