Private Sector Demand Drives Construction Employment

May 30, 2013

Construction employment increased in 170 out of 339 metropolitan areas in the last year, according to analysis of federal data by the Associated General Contractors of America (AGC). Between April 2012 and April 2013, employment declined in 123 areas and remained flat in 46. AGC officials attribute this gain to an increased demand in private sector construction.

“Demand for construction continues to grow in many parts of the country amid increasing private sector investments in new residential, energy and supply chain facilities like factories, rail lines and warehouses,” said Ken Simonson, AGC’s chief economist. “These private sector gains appear strong enough in many parts of the country to outpace declining public sector investments in infrastructure and buildings.”

Pascagoula, Miss. added the highest percentage of new construction jobs (45 percent, 1,700 jobs), followed by Napa, Calif. (36 percent, 800 jobs); Merced, Calif. (19 percent, 300 jobs); Baton Rouge, La. (16 percent, 6,600 jobs) and Lake Charles, La. (16 percent, 1,400 jobs). Two metro areas in Texas virtually tied for the most jobs added in the past 12 months: Dallas-Plano-Irving (11,500 jobs, 11 percent) and Houston-Sugar Land-Baytown (11,400 jobs, 6 percent). They were followed by Los Angeles-Long Beach-Glendale, Calif. (9,400 jobs, 9 percent); Fort Worth-Arlington, Texas (7,800 jobs, 13 percent) and Phoenix-Mesa-Glendale, Ariz. (7,500 jobs, 9 percent).

The largest job losses were in Chicago-Joliet-Naperville, Ill. (-5,900 jobs, -5 percent), followed by Northern Virginia (-3,200 jobs, -5 percent); Cincinnati-Middletown, Ohio-Ky. (-2,400 jobs, -6 percent) and Raleigh-Cary, N.C. (-2,300 jobs, -8 percent). Bellingham, Wash. (-20 percent, -1,300 jobs) lost the highest percentage. Other areas experiencing large percentage declines included Decatur, Ill. (-18 percent, -700 jobs); Eau Claire, Wis. (-17 percent, -500 jobs) and Rockford, Ill. (-17 percent, -700 jobs).

AGC officials said that improving construction employment was masking longer-term problems that could come from declining public sector investments. They noted, for example, that economic growth could suffer as aging transportation infrastructure forces firms to pay more to ship goods. At the same time, increasing construction employment means more areas could experience worker shortages in the near future amid a lack of available workers with experience in certain key construction skills.

“Declining investments in infrastructure and other public assets could ultimately undermine the very growth that is currently boosting employment,” said Stephen E. Sandherr, the association’s chief executive officer. “With hiring on the rebound in many areas, we also need to rebuild vocational education programs and rethink immigration construction caps to ensure there are enough skilled workers available to meet growing demand.”