Construction industry still suffering

California lost the most construction jobs in the 12-month period through January while Nevada led the nation with the largest percentage decrease in construction employment, the Associated General Contractors of America reported.

Thirty-eight states showed double-digit declines in construction employment, with Nevada leading at 29.9 percent, or 29,800 jobs, the Washington, D.C.-based industry group reported Wednesday. Arizona was next at 26 percent, followed by Colorado at 22.2 percent and Idaho at 21 percent.

“Construction employment is dropping everywhere and plummeting almost everywhere,” AGC chief economist Ken Simonson said. “Looking at this data, it is quite clear that the construction industry has yet to hit bottom.”

California lost 128,700 construction jobs over the past 12 months, an 18 percent decline, while Texas lost 95,600 jobs (down 14.7 percent) and Florida lost 90,700 jobs (down 20.4 percent).

North Dakota had the smallest decline (1 percent) in construction employment.

Simonson noted that 31 states lost construction jobs between December and January. Weather can heavily affect month-to-month employment figures, he added.

The construction industry continues to bear the brunt of the economic downturn in Southern Nevada, where total employment fell 27.2 percent in 2009. High vacancy rates in all commercial markets, along with an excess inventory of new homes built over the last several years, have brought new construction to almost a standstill in Las Vegas.

The trailing 12-month total for commercial building permits in Southern Nevada has fallen from a peak of 1,600 in 2006 to slightly more than 200 in 2009. Residential permits fell from more than 40,000 to about 5,000 during the same period.

Stephen Miller, chairman of the economics department at the University of Nevada, Las Vegas, said seasonally adjusted construction employment has fallen from a peak of 109,000 in early 2006 to 63,000, about where it was before the run-up in 2001.

“We added a lot of rooms and it turns out that was not a great decision,” Miller said. “I think we’re getting near the bottom. Permit data can’t go below zero, right? It’s been bouncing around the bottom for four months. It’s unlikely we’ll repeat what we saw in the last decade.”

With some trade groups reporting unemployment rates of 50 percent, Nevada’s construction industry accounts for roughly one-third of all displaced workers receiving unemployment benefits.

Nevada’s seasonally adjusted unemployment rate stood at 13 percent in January, compared with 9.6 percent a year ago. Construction employment sank 28.7 percent from January 2009, natural resources and mining is down 6 percent and manufacturing is down 10.8 percent, the Nevada Department of Employment, Training and Rehabilitation reported.

Second-quarter hiring prospects for Las Vegas remain among the weakest in the nation, Manpower’s quarterly Employment Outlook Survey found. Only 13 percent of companies surveyed plan to hire more workers from April to June, while 19 percent expect to reduce their payrolls. Sixty-one percent will stay the same.

Job prospects appear best in manufacturing and professional and business services, the survey said. Industries planning to reduce staffs include construction, transportation and utilities, wholesale and retail trade, financial services and government. Leisure and hospitality hiring is expected to remain unchanged.

AGC officials in Washington are urging the Senate to pass an extension to the nation’s surface transportation program and to accelerate stimulus-funded construction projects.

“As privately funded construction activity continues to decline, federal investments in infrastructure are often the difference between a job and unemployment for what’s left of the industry,” Simonson said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or
702-383-0491.

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