Construction jobs dwindle

Las Vegas construction employment declined by 19.8 percent, or 18,900 jobs, from a year ago, a second-quarter report from Associated General Contractors of America showed.

Las Vegas was among the cities with the largest drop in construction employment from June 2008, tied with Atlanta at No. 307, or 45th-worst, in a survey of 352 metropolitan areas.

Reno-Sparks was No. 351 on the list with a 33.3 percent decrease, or 5,800 jobs. Pascagoula, Miss., had the largest decrease, with a 35.8 percent decrease (2,400 jobs).

Construction workers remain on the leading edge of job losses during this recession, said Ken Simonson, chief economist for the Washington, D.C.-based contractors association. They accounted for one-third of job losses reported in July, he said Friday from New York.

"While other sectors of the economy have been hit hard, construction employment has been devastated," he said. "We saw the home-building sector drop off in '06, and then with the confluence of economic and financial events in '08, every sector got slammed. Unfortunately, there's no relief yet for residential or nonresidential construction."

The group's analysis, based on employment numbers reported by the Bureau of Labor Statistics, shows that few places in America have been spared the widespread downturn in construction employment over the past year.

More than 200 metropolitan areas suffered double-digit percentage decreases in construction employment, Simonson noted. Only 10 cities saw increases, led by Columbus, Ind., up 31 percent. Nine cities were unchanged.

Mass layoffs, involving 50 or more workers, dipped slightly in June from record numbers in May, adjusted for seasonal variations, but were more than 60 percent above year-earlier levels in both events and workers, the Bureau of Labor Statistics reported.

Las Vegas has historically been heavily dependent upon construction work, which at one time accounted for more than 11 percent of total employment, about twice the national average. The contractors association reported 76,700 construction jobs in Las Vegas, or 8.9 percent of total employment for June.

Nevada has lost about 28,600 construction jobs in the past year, and losses could deepen after projects such as CityCenter and Cosmopolitan wrap up on the Strip, said Jered McDonald, economist for the Nevada Department of Employment, Training and Rehabilitation.

"It has been the toughest-hit industry, I would say. Construction was the first industry to start losing jobs in the recession," McDonald said.

Construction employment peaked in June 2006, so this year's job losses are on top of the previous two years. Most of the layoffs in leisure and hospitality didn't come until 2008, the economist said.

"It's going to be some time before construction turns around," McDonald said. "It has to do with the national economy. People have to get into the mood of buying again. Look at vacancy in commercial. There's no appetite for commercial real estate construction."

The Clark County Construction Index compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, dropped to 79.96 in May from 82.49 the previous month. The five-month average showed a modest positive change to 84.52, but the index is still down 33 percent from the same month a year ago.

Looking around Las Vegas Valley, it's no surprise the index is far below its peak, said Keith Schwer, director of the UNLV research center. Several large construction projects have been halted, including Echelon on the Strip, the Summerlin Centre Mall, Wyndham time share and ManhattanWest condos.

Residential construction has slowed to a crawl. New-home permits fell 50 percent through the first half of the year to 1,531, Las Vegas-based SalesTraq reported.

One positive economic indicator was a 113 percent increase in commercial permit valuation to $280 million in May, according to CBER.

"It's hard to believe that a one-month improvement in the index is likely to hold in the months ahead," Schwer said, "though some prospect for relief shows in federal construction projects under consideration."

Stephen Sandherr, chief executive officer of AGC of America, said the industry needs to act to ensure the next government stimulus package doesn't leave "idle cranes and empty work boots."

The contractors association urged Congress to pass a surface transportation bill that would create or save an estimated 616,000 jobs in each of the next six years. Washington also needs to act on delayed legislation to finance vital water, aviation and maritime infrastructure projects, Sandherr said.

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