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Construction Employment Declines By 16,000 In December As The Industry’s Unemployment Rate Hits 20.7 Percent, Analysis Finds

Winding Down of Stimulus-Funded Projects, Other Temporary Federal Programs, Takes Toll on Industry as Heavy and Civil Engineering Construction Employment Declines by Nearly 13,000

Employment in construction declined by 16,000 during the month of December 2010 as the industry's unemployment rate hit 20.7 percent, according to analysis of federal employment figures released today by the Associated General Contractors of America. Even as the industry continues to suffer from weak private sector demand the benefits of the temporary stimulus program appear to be winding down, association officials noted.

"At this point, it doesn't look like there's anything to replace the temporary help that the stimulus has been providing for the construction industry," said Ken Simonson, the association's chief economist. "Today's figures offer yet another reminder that the construction industry remains, and is likely to remain, the hardest-hit industry in the economy."

Construction employment declined by 0.3 percent during the month, leaving only 5.6 million people employed in the industry, a 27 percent decline since employment in the industry peaked in August 2006 at 7.7 million, Simonson noted. During the past twelve months the construction industry has lost 93,000 jobs, he added. Meanwhile, the industry's unemployment rate is more than double the overall, not seasonally adjusted, national unemployment rate of 9.1 percent.

Heavy and civil engineering construction, the category most likely to be affected by the stimulus and other temporary federal programs like base realignment, experienced the largest decline within the construction sector, dropping by 12,700 for the month.

Before December and November, that segment of the construction industry had been adding jobs for much of 2010. The decline indicates that stimulus and other temporary federal projects, especially in transportation, have begun winding down, Simonson suggested. He added that unseasonably harsh weather during December probably exacerbated the job decline in heavy construction, which is far more vulnerable than most industries to outdoor conditions.

Noting that there are now over 1.7 million unemployed construction workers in the U.S., association officials urged Congress and the Administration to act quickly to pass several long-stalled infrastructure bills. They said that further delays would not only hurt construction employment, but would lead to increased costs for taxpayers.

"You can pay relatively little to maintain aging roads, water systems and locks now, or you can pay a lot to repair them later," said Stephen E. Sandherr, the association's chief executive officer. "The best way to boost the economy and save taxpayers money is to act now to address our growing infrastructure debt."

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