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Construction Unemployment Rate Jumps to 18.8%

Construction unemployment rate is highest for any industry, roughly double overall rate as federal projects remain only bright spot for hard-hit sector

The construction unemployment rate jumped to 18.8% in November as the sector lost another 5,000 jobs since October, according to an analysis of new federal employment data released today by the Associated General Contractors of America (AGC). The data indicates that the construction sector has suffered more than any other industry during the economic downturn, association officials say.

“The unemployment report shows construction still has not broken free of the recession that has gripped the industry since 2006,” says Ken Simonson, the association’s chief economist. “Other than the stimulus and other temporary federal programs, it has been a pretty bleak four yours for the industry.”

Simonson notes that the construction industry has lost 2.1 million jobs since employment in the sector peaked in August 2006. He added that the sector has continued to lose jobs during the past 12 months even as overall private employment has picked up. Since November 2009, the industry has lost 117,000 jobs while the private sector added 1,088,000 jobs. The industry’s 18.8% unemployment rate, not seasonally adjusted, also was the highest of any industry and roughly double the overall unemployment rate.

The only construction segment to add jobs in the past year has been heavy and civil engineering construction, which has benefitted from federal stimulus, military base realignment, and Gulf Coast hurricane-prevention projects, Simonson observes. Meanwhile, residential construction has lost 79,000 jobs over the past twelve months, while non-residential specialty trade contractors and non-residential building — the other two segments in the nonresidential category — have lost 62,000 jobs.

Association officials caution that the stimulus and other temporary federal programs would begin winding down in 2011, most likely before private, state, or local demand for construction picks up. They urge Congress and the Administration to act on a series of long-delayed infrastructure bills for water, transportation and other infrastructure programs.

“We’re hoping Congress doesn’t cut off federal investments that are almost single-handedly keeping this industry together,” says Stephen E. Sandherr, the association’s CEO. “Even the Deficit Commission understands that the one thing we can’t afford to do as a nation is neglect our infrastructure,” Sandherr adds, referring to the commission’s proposal to raise the gas tax to fund transportation upgrades.

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