Construction employment rebounded by 464,000 jobs in May, according to a recently released analysis by the Associated General Contractors (AGC) of America of government data.
According to AGC, the total number of jobs in May remained 596,000 below the latest peak in February and the industry’s 12.7% unemployment rate was the highest for May since 2012. Association officials cautioned that future job losses are likely as temporary federal support programs end, state and local officials deal with tighter budgets, and private sector demand declines later this year.
“The huge pickup in construction employment in May is good news and probably reflects the industry’s widespread receipt of Paycheck Protection Program loans and the loosening of restrictions on business activity in some states,” AGC Chief Economist Ken Simonson said in a statement. “Nevertheless, the industry remains far short of full employment, and more layoffs may be imminent.
The association’s latest survey found that nearly one-fourth of contractors reported a project that was scheduled to start in June or later had been canceled. With most states and localities starting a new fiscal year on July 1, Simonson says even more public construction is likely to be canceled unless the federal government makes up for some of their lost revenue and unbudgeted expenses.
The gain of 464,000 jobs in May followed losses of 995,000 in April and 65,000 in March—which came about after the outbreak of the coronavirus (COVID-19)—for a cumulative loss over three months of 596,000. Construction employment totaled 7,043,000 in May, about where it stood in late 2017.
The industry’s unemployment rate in May was 12.7%, with 1,187,000 former construction workers idled. These figures were roughly four times as high as in May 2019 and were the highest May levels since 2012 and 2011, respectively.
Association officials said the best way to avoid the expected future construction job losses is for federal officials to boost funding for infrastructure, including highway, bridges, waterways, and airports. They noted that the additional funding would help cover expected state and local budget shortfalls and would help replace expected declines in private-sector demand.
SOURCE: Associated General Contractors