Nevada misses nationwide building bounce

A glimmer of economic recovery has bypassed Nevada once again.

A new report from construction trade group Associated General Contractors of America shows stabilization in the building sector nationally, with roughly half the states adding construction jobs in April and May. That's an improvement compared with 2009, when every state was shedding building jobs.

But Nevada continues to lead the country in construction jobs lost, posting a 23 percent decline year over year in May. That's 18,900 jobs cut, the association's numbers show.

A similar dynamic has visited Nevada's overall jobless rate, which rose to a record 14 percent in May, even as 37 states saw unemployment drop. Nevada has the highest jobless level in the country.

But the Silver State's labor-market pain is at its worst in construction.

Two of every four Nevadans receiving unemployment benefits are in construction, said Steve Holloway, executive vice president of the local chapter of Associated General Contractors. The 80,000-plus jobs slashed in the recession comprised more than half of the sector's peak of roughly 145,000 positions. Construction employed 12.7 percent of Nevada's workers before the recession; today, it employs 6.7 percent.

"There's not a day that goes by without a company shutting down," Holloway said. "People are still taking significant cuts in salaries and benefits. Given all the economic indicators, this is a depression for us. It's worse than anybody can remember, and we have people walking around who remember the Great Depression."

Ken Simonson, chief economist of Associated General Contractors of America, called Nevada's sustained slide "a prolonged payback" for the growth the state experienced between 1995 and 2006.

Nevada essentially doubled its construction employment in the 11-year period, including several months in which the jobs base grew 22 percent year over year.

"Nevada has been an outlier in many ways," Simonson said. "It had outsized construction growth, with double-digit rates of growth when the rest of the country was in the single digits, and now your declines are triple the percentages of the country as a whole."

Nor has federal stimulus money stanched construction-job losses. That's partly because Nevada has a big supply of unoccupied homes, offices, warehouses and shopping centers, and lack of demand in those submarkets cancels out gains in infrastructure, Simonson said. And much of the stimulus has yet to even funnel down to contractors, thanks to administrative and legislative delays, he said.

Industry observers don't expect construction's employment outlook to improve in the near term.

Overbuilding in residential and commercial real estate means Nevada should lag the rest of the country in construction-sector recovery, Simonson said. Fiscal woes won't help: For cash-strapped municipalities, it's easier to defer construction of a new library than it is to lay off librarians.

Holloway said he and other industry experts don't expect Nevada's job losses to level off until 2012. But a few measures could hasten an end to the slump, he said. His group wants to introduce legislation in 2011 to restore state and local capital-improvement budgets that have been redirected to cover budget shortfalls. Extending bonding authorities for school districts would also help, he said, and indexing the state's gasoline taxes to inflation would yield more federal matching funds for road upgrades.

Some of those measures, such as indexing the fuel tax, might face obstacles among lawmakers, but every additional $1 billion in infrastructure spending would generate up to 28,000 construction jobs, Holloway said.

"We (the construction sector) are the reason there's a depression in this state," he said. "Until construction recovers, the economy of this state is not going to recover. Until we put people in construction back to work, we're going to be faced with a huge fiscal crisis in government."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.