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Homebuilding Sees Employment Gains, Nonres Stumbles

September 8, 2020
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Construction employment increased by 16,000 jobs in August, but the gains were concentrated in housing. Infrastructure and nonresidential building construction lost 11,000 jobs, according to an analysis by the Associated General Contractors of America of government data.

In addition, an AGC survey indicates growing pessimism about a return to normal levels of construction business amid a proliferation of project cancellations.

“Construction is becoming a tale of two sectors, as homebuilding and limited nonresidential niches thrive but most other private, as well as public, construction shrinks,” said Ken Simonson, chief economist, in a prepared statement. “These employment numbers are in line with our survey, which found a plurality of construction firms expect it will take more than six months before their volume of business matches year-ago levels.”

The AGC of America-Autodesk Workforce Survey, released on September 2, found that 38 percent of respondents expect it will take more than six months for their firm’s volume of business to return to normal, relative to a year earlier. In a survey the association conducted in mid-June, only 30 percent of firms said they expected a return to normal volume would require more than six months.

A likely reason for the more pessimistic outlook is the rapid increase in postponed or canceled projects, the economist said. Six of 10 firms said a scheduled project has been postponed or canceled, nearly double the 32 percent reporting cancellations in the June survey.

The employment pickup in August was limited to homebuilding, home improvement, and a portion of nonresidential construction, Simonson said. There was a rise of 27,700 jobs in residential construction employment, comprising residential building (3,200) and residential specialty trade contractors (24,500). There was a net decrease of 11,000 jobs in nonresidential construction employment, covering nonresidential building (10,200), specialty trades (-15,700) and heavy and civil engineering construction (-5,500).

The industry’s unemployment rate in August was 7.6 percent, with 762,000 former construction workers idled. These figures were more than double the August 2019 figures of 3.6 percent and 361,000 workers, respectively.

Source: AGC

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