Residential Construction and Public Works Sectors Drag Down Construction Employment Levels for First Time in 14 Months, Association Officials Call on Washington to Fund and Pass Needed Infrastructure Repairs

Apr 3, 2015 -- Construction declined by 1,000 in March but is still up by 282,000 compared to the prior year, as the sector's unemployment rate fell to 9.5 percent, according to an analysis by the Associated General Contractors of America. Association officials noted that declining demand for residential and public sector projects offset gains in other areas to contribute to the overall month job losses.

"After 14 months of steady job gains, construction employment suffered in March," said Ken Simonson, the association's chief economist. "Except for multifamily construction, home building remains weak and government officials just can't seem to find a way to pay for needed repairs to a host of aging facilities."

Construction employment totaled 6,344,000 in March, compared to 6,345,000 in February and 6,062,000 in March 2014, Simonson noted. Residential building and specialty trade contractors lost 2,800 jobs (-0.1 percent) since February but added 136,300 jobs (6.0 percent) over 12 months. Within the residential sector, however, results were split, with residential building contractors adding 3,700 jobs for the month while residential specialty trade contractors lost 6,500 jobs compared to February.

Nonresidential contractors—building, specialty trade, and heavy and civil engineering construction firms—hired a net of 1,100 workers for the month and 145,000 (3.8 percent) since March 2014. As with the residential sector, the nonresidential employment sector varied by segment. The nonresidential and specialty trade contractors and nonresidential building contractors added a combined 5,000 jobs for the month. But heavy and civil engineering contractors—who typically perform public sector projects like highway construction—lost 3,900 jobs since February.

The employment figures are consistent with February spending data released earlier this month which showed declining investments in residential and public sector construction projects offsetting growing demand for private, nonresidential construction. Simonson noted that the industry's recovery would continue to suffer if public sector investments continue to decline and the residential market remains weak.

"The threat of funding cuts for needed public infrastructure will continue to impact firms' ability to add more employees to the payroll," Simonson added.

Association officials urged Congress and the Obama administration to find a way to finance and pass needed long-term infrastructure measures to address aging transportation, energy and water systems. They noted that the association recently launched a nationwide effort called #DriveBetterRoads designed to encourage elected officials to boost funding for aging highways and bridges, for example.

"Construction workers shouldn't have to lose their jobs because of Washington's inability to address our growing infrastructure needs," said Stephen E. Sandherr, the association's chief executive officer. "More significant, the overall economy shouldn't have to suffer from the negative impacts of greater traffic, poorer road conditions, unreliable power grids and unsafe drinking water."

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