by Brianna Crandall — April 1, 2011—The Associated General Contractors of America (AGC) released its analyses of four sets of government data and producer price index figures following the release of each in recent weeks, showing a mixed bag of results for the troubled construction industry.
In the best news recently, the construction industry added 33,000 jobs in February 2011 even as the industry’s unemployment rate was 21.8 percent, more than twice the national average, according to AGC analysis of new federal employment data. As welcome as the new figures are, association officials cautioned that it was too early to tell whether the industry is improving or simply benefitting from the more favorable weather in February compared to the previous month.
Ken Simonson, the association’s chief economist, cautioned that despite experiencing the single largest monthly gain in construction employment since March 2007, construction employment is still down by over 2.2 million from the industry’s April, 2006 peak, a nearly 30 percent decline. At that time over 7.7 million people worked in construction nationwide, while the industry now employs only 5.5 million people, Simonson noted. He added that for the 47th consecutive month, the February total was lower than the same month a year before.
Thirty-six states lost construction jobs between January 2010 and 2011, even as more states added construction jobs than lost them between December and January, the AGC reported in an analysis of state employment data released recently by the U.S. Department of Labor. Figures are available by state and by rank. Association officials cautioned that despite the increase in monthly employment, the construction industry is still facing severe economic headwinds.
AGC also released new employment figures along with its new blueprint to boost private and public construction, that detail metro construction employment changes since January 2007. The figures show that Phoenix, AZ has lost more construction jobs (91,400) than any other metro area since the start of the construction downturn in January 2007—a 54 percent decline. Nationwide, 28 cities lost 50 percent or more of their construction jobs, including Boise, ID; Fort Lauderdale, FL; Medford, OR; and Merced, CA.
Financial pressures on contractors grew worse in February as prices for key construction materials rose sharply even as prices construction firms charge for completed projects remained stagnant, according to AGC analysis of producer price index figures released March 16. Association officials said the price squeeze will make it harder for the construction industry to recover and urged federal officials to act on AGC’s newly released blueprint of recovery measures.
Prices for materials used in construction leaped 1.1 percent in February and 6.1 percent during the past 12 months, while price indexes for finished buildings stayed nearly level during the same timeframe, AGC noted. Construction costs also outran the producer price index for finished goods, which rose 5.6 percent since February 2010.
See also “AGC outlines measures to boost U.S. private and public construction activity” on FMLink.
