As U.S. GDP numbers improved this fall and the Dow flirted with 10,000, many economic pundits declared the recession over and the country on the mend, even as overall unemployment reached 10% nationwide.

Meanwhile, construction unemployment in 2009 nearly doubled the general numbers, soaring to 19%, with some regions reaching 28%–35% job losses from August 2008 to August 2009, according to the Bureau of Labor Statistics.

In Colorado, average employment in construction for 2009 was nearly 138,000 workers, down 14.4%, or 23,200 jobs from 2008, says the annual economic outlook from the Leeds School of Business at CU Boulder

The report adds, “While the pace of layoffs will subside in 2010, additional workforce reductions, particularly in the first half of the year, are expected in the face of the limited increase in residential activity and the overall decline in new construction value.”

The average construction employment in Colorado for 2010 is expected to fall to 129,000 workers, a smaller loss than during 2009 but still another 6.5% decline, or about 9,000 jobs. The reduction would take the construction industry to its lowest job totals of the new millennium, back to levels not seen since the late 1990s, if the CU economists are correct.

“The problems facing the construction industry aren’t just devastating construction workers, they are crippling our broader economy,” says Stephen Sandherr, chief executive officer for AGC of America. “Simply put, you can’t fix our economy until you fix the construction industry.”

Transportation Sector

A recent industry survey led by AGC revealed that more than 40% of transportation contractors anticipate additional layoffs of non-seasonal employees in 2010, and almost 80% of road and transit builders expect a construction market decline next year, despite the federal stimulus, as the multi-year transportation bill remains stalled.

While the $27 billion dedicated to highway construction in the $775-billion stimulus package has likely saved thousands of construction-related jobs, it was not enough to prevent widespread layoffs among road and transit contractors. And while stimulus funding will continue supporting transportation projects next year, 44% of contractors anticipate having to lay off additional permanent employees due to overall economic conditions, the AGC survey found. Sixty-three percent also reported they had to lay off permanent employees during 2009 due to adverse business conditions.

“The key to sustainable new job creation in the transportation construction industry is congressional passage soon of the overdue, long-term federal highway and transit program funding bill with new resources for the tapped-out Highway Trust Fund,” says Mike Acott, president of the National Asphalt Pavement Association.

“Contractors in many states still do not see sustainable, state-funded, market growth on the horizon until the overall economy rebounds significantly,” says Alison Black, vice president for policy and chief economist for the American Road & Transportation Builders Association. “When they hear that the one source of stable funding for the market over the past four years is in doubt—the core federal highway and transit program—it’s not surprising many are tightening operations.”

Despite the federal stimulus funding, over three-quarters of the 527 firms that responded to the AGC survey say they anticipate either a “slight” (46%) or “severe” (32%) decline next year in the state markets in which they work. More than 76% expect state transportation departments to put out less work to bid in 2010 than they did this year.

“It is impossible to overstate just how difficult current conditions are or how dire the outlook for next year is,” says Ken Simonson, chief economist for AGC. “One-time investments in transportation infrastructure like the stimulus help, but they’re simply no substitute for having a long-term investment strategy in our roads, bridges and transit systems.”

Simonson noted that the AGC survey found that only 17% of transportation contractors will enter 2010 with a work volume backlog at least as large, by value, as they had entering 2009. Almost one in five reported they will enter 2010 with at least 50% less backlog than last year. An additional 33% reported the value of their work backlog will be 25% to 50% less going into 2010.

Private Sector

New federal figures show that private construction investments declined by 20.6% between September 2008 and September 2009.

A recent Census Bureau report indicates that there’s no sign of an economic recovery yet for the nation’s construction industry, AGC’s Sandherr says. “These figures show just how dire business conditions are for the nation’s contractors and their six million-plus employees,” he says. “The only green shoots contractors are seeing are the weeds sprouting around their idle construction equipment.”

The federal figures show the annualized rate of private construction spending declined from $774 billion a year in September 2008 to $614 billion a year in September 2009.

On the nonresidential side alone, construction spending for lodging declined by 37.4%, 33.3% for offices, and 36% for commercial structures over the past 12 months. Manufacturing and power construction were the only parts of the private construction market to see increased investments, with 11% and 4.8% gains respectively, the Census Bureau says.

More than 70% of all construction projects are privately funded.

“Increased public investments in construction and infrastructure are welcome news, but this industry will continue to suffer while demand for private construction continues to plummet,” Sandherr says.