February job gains in construction the highest in almost four years

The construction industry added 33,000 jobs in February even as the industry’s unemployment rate was 21.8%, more than twice the national average, according to an analysis of new federal employment data released March 4 by the Associated General Contractors of America. As welcome as the new figures are, association officials cautioned that it was too early to tell whether the industry is improving or simply benefiting from the more favorable weather in February compared to the previous month.

“Given what this industry has been through, figures like these are as welcome as they are long overdue,” said Ken Simonson, the association’s chief economist. “The question now is whether these figures reflect a thaw in economic conditions for the industry, or the benefits of warmer weather and less snow in many parts of the country in February.”

Simonson cautioned that despite experiencing the single largest monthly gain in construction employment since March 2007, construction employment is still down by over 2.2 million from the industry’s April 2006 peak, a nearly 30% decline. At that time over 7.7 million people worked in construction nationwide, while the industry now employs only 5.5 million people, Simonson noted. He added that for the 47th consecutive month, the February total was lower than the same month a year before.

The construction economist noted that both residential and nonresidential construction sectors added jobs in February. The largest gains came from the nonresidential specialty trade sector, which added 16,700 jobs during the month. Residential specialty trade contractors added another 11,000 jobs in February. The only segment of the construction industry to shed jobs in February was nonresidential building, which lost 2,000 jobs.

Association officials said that construction employment is likely to post modest gains at best through much of 2011 as stimulus funds dry up and private demand for construction recovers slowly. They added that continued uncertainty about the size and extent of federal budget cuts, combined with repeated delays in enacting multiyear infrastructure investment and repair programs, would make it hard for many construction firms to add jobs.

“As heartwarming as these gains are, it will be hard for the industry to build on this momentum in the face of weak demand and continued political gridlock,” said Stephen Sandherr, the association’s chief executive officer. “The certainty that comes with having long-term federal investment programs in place for highway, transit, airport and water programs will give this industry the stability it needs to recover.”