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Construction Unemployment Rate Rises as Spending Declines

The construction industry added 19,000 jobs in August as a strike that had lowered employment in July ended, but the sector’s 17-percent unemployment rate was the highest August rate ever, according to a new analysis released by the Associated General Contractors of America. Meanwhile, continuing gridlock in Washington over infrastructure legislation and expiring tax rates threatened to keep construction workers unemployed, AGC officials said.

“Construction layoffs in May through July offset modest job gains in March, April and August, leaving the industry with a tragically high unemployment rate last month,” said Ken Simonson, chief economist for AGC.

Construction spending fell 1 percent in July to a seasonally adjusted annual rate of $805 billion, a 10-year low and a decline of 11 percent from July 2009, the Census Bureau reported last week. Private nonresidential spending rose 0.8 percent for the month, primarily because of an 8-percent rise in power construction. However, private nonresidential spending dropped 24 percent from a year earlier. Public construction fell 1.2 percent for the month and 7.9 percent year over year as declining state and local spending outweighed the boost from federal stimulus funds.

Private residential spending declined 2.6 percent for the third straight monthly decline since the homebuyer tax credit expired at the end of April.

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