US construction employment slumps again

A further 9000 jobs were lost in the US construction industry in the month from May to June, compounding a five-year slump and threatening future growth prospects.

According to the latest figures from the Associated General Contractors of America (AGC), the downturn in public works projects in the US is offsetting limited private sector gains.

AGC chief economist Ken Simonson said, "In the second half of 2011, there should be a strong gain in apartment and manufacturing construction, some improvement in construction of hospitals, distribution centres and hotel renovations and ongoing strength in power and energy projects.

"But job creation in these niches may be swamped by further declines in public construction and continued weakness in single-family homebuilding, office and retail work."

Residential building

Residential building and specialty trade employment dropped a combined 9900 jobs in June and 35000, or -1.7 %, over the past 12 months.

This was offset to some extent by the addition of 2700 jobs in the non-residential building and specialty trade contractor sector in June. Year-on-year, the number of employees in this sector rose by +0.6%.

Meanwhile, employment in heavy and civil engineering construction grew year-on-year by +2.8% at June, 2011, but shrank month-on-month by 1800 jobs. The total for June 2011 was 23000 jobs.

The fact that the industry unemployment rate improved year-on-year in June was actually not much to celebrate, according to Mr Simpson.

The unemployment rate stood at 15.6% in June 2011, compared to 20.1% at the same point last year. But the June 2011 employment total of 5513000 was only 2000 higher than in June 2010 and more than 2.2 million, or -29%, below the peak in April 2006.

"Even with the drop in the industry unemployment rate, the lack of hiring means that people are leaving construction, not going back into it," Mr Simonson said. "That will make future expansion all the more difficult."