January Construction Employment Falls for 5th Month in a Row

Down 29% since April 2006's peak, construction has suffered the longest and steepest employment decline of any industry

According to U.S. Bureau of Labor Statistics (BLS) figures reported last week, construction lost 32,000 jobs in January (seasonally adjusted), likely due in part to widespread exceptionally bad weather during the mid-January reporting period. The Associated General Contractors' Chief Economist Ken Simonson notes that construction employment fell for the fifth month in a row, to 5,455,000, down 2.3% from January 2010 and the lowest level since March 1996.

The BLS posted routine annual revisions to past data, which made April 2006 the peak month for construction employment, at 7,726,000. The drop since then of 2,271,000 (29%) is the longest and steepest of any industry. In contrast, overall private employment fell from December 2007 to March 2010 and rose 1.2% in the past 12 months.

Among the five construction employment categories that BLS reports, heavy and civil engineering construction lost 0.8% in January but gained 1.6% over 12 months, reflecting January’s bad weather but also much of the federally funded stimulus, military base realignment and Gulf Coast hurricane-prevention work in the past year.

Residential specialty trade contractors added 0.5% in January but lost 3.9% over 12 months, possibly indicating a recent pickup in multifamily construction. Residential builders shed 0.6% in January and 5.5% for the year; nonresidential builders, -1.0% and -1.3%, respectively; and nonresidential specialty trade contractors, -1.1% and -2.1%.

Architectural and engineering services employment, a harbinger of future demand for construction, slipped 0.1% and 0.8%. Average hourly earnings in construction totaled $25.46, up 9 cents for the month and 32 cents (1.3%) over 12 months.

See Ken Simonson's construction-spending analysis.