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Construction Employment Drops in June, Decline in Public Works Cited

The construction employment industry lost 9,000 more jobs from May to June, according to an analysis of federal employment data released this week by the Associated General Contractors of America. Officials said declines in public sector construction activity will negate any pickup in private sector demand unless Congress and states fully fund needed infrastructure spending and streamline the approval process for public projects.

The industry unemployment rate fell from 20.1 percent a year ago to 15.6 percent in June 2011, said AGC chief economist Ken Simonson. However, Simonson added, June 2011 employment was 29-percent below the peak numbers in April 2006.

“Even with the drop in the industry unemployment rate, the lack of hiring means that people are leaving construction,” Simonson said. “That will make future expansion all the more difficult.

“In the second half of 2011, there should be a strong gain in apartment and manufacturing construction; some improvement in construction of hospitals, distribution centers and hotel renovations; and ongoing strength in power and energy projects. But job creation in these niches may be swamped by further declines in public construction and continued weakness in single-family homebuilding, office and retail work.”

Association officials said that it is vital for public officials at all levels of government to renew commitments to maintain and update infrastructure. The construction association also reiterated its call to streamline approvals of public works.

“The announcement yesterday of the outline of a long-delayed federal highway and transit funding authorization, with a quicker approval process, is an encouraging note, but the proposed funding level is grossly inadequate,” said Stephen Sandherr, the association’s CEO. “Meanwhile, a budget stalemate in Minnesota has already led to a halt in state highway projects there, adding to the unacceptably high loss of construction jobs. Other road, school and public works projects are at risk of shutting down soon unless government officials act promptly.”

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