Construction August Jobless Rate Dips, But Job Losses Continue

The construction industry's unemployment rate edged downward in August, to 13.5% from July’s 13.6%, the Labor Dept.'s Bureau of Labor Statistics reported. Last month's rate also was an improvement over the August 2010 level of 17.0%.

But the latest monthly BLS unemployment report, released on Sept. 2, also said construction lost 5,000 jobs in August and construction’s jobless rate was still the highest among U.S. industry categories.

Ken Simonson, the Associated General Contractors' chief economist, said the August figures continue "a long-running zig-zag pattern of minimal up-and-down changes in constrution employment."

He added, "The free-fall has ended, but the seasonally adjusted employment total in August--5.5 million--has been virtually unchanged for a year and a half."

Most segments of the construction industry recorded job losses last month, with nonresidential specialty trade contractors showing the steepest decline, shedding 8,400 positions. Two sectors showed gains--residential specialty trade contractor employment rose by 6,800 and nonresidential buildings sector jobs increased by 1,000. The numbers are adjusted for seasonal variations.

Anirban Basu, the Associated Builders and Contractors' chief economist, said, "The risk of recession is expanding rapidly. He added that the BLS unemployment figures and Commerce Dept. report showing a decline in construction put in place for July "both reflect the ongoing slowdown in construction activities."

The BLS numbers do show some signs of life in the industry. Architectural and engineering services employment, a possible indicator of future construction market trends, was up in August, posting an increase of 3,500 jobs, seasonally adjusted.

Basu also says contractors who work on buildings' foundations and exteriors and site preparation work added a total of 19,100 jobs in August, using figures that aren't adjusted for seasonal variations. "This suggests that some semblance of construction momentum remains."

August also was the 11th-consecutive month in which construction's unemployment rate was better than year-earlier levels.

The BLS jobless rates for construction and other industries are not seasonally adjusted. The volume of construction projects tends to rise in the summer and early fall, and the industry’s unemployment rate in those months tends to drop.

The overall U.S. unemployment rate in August was 9.1%, BLS reported, the same level as July’s.

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.

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