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Construction Employment Declines by 5,000 in August

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Construction employment showed little movement in August, dipping 5,000 below the July total but remaining 4,000 higher than a year ago, according to a recent analysis of new federal employment data by the Associated General Contractors of America. Association officials said the numbers are consistent with a pattern of small gains followed by slight decreases, as demand for construction remains weak.

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“This report continues a long-running zigzag pattern of minimal up-and-down changes in construction employment,” said Ken Simonson, the association’s chief economist. “The free-fall has ended, but the seasonally adjusted employment total in August—5.5 million—has been virtually unchanged for a year and a half."

The construction economist said that the nonresidential construction sector lost 9,000 jobs in August. Within the nonresidential sector, employment in heavy and civil engineering construction decreased by 1,600 for the month as work on stimulus-funded public works, military bases and hurricane-prevention projects in the Gulf Coast wound down. Nonresidential specialty trade contractors and nonresidential building contractors shed a combined 7,400 jobs, while their residential counterparts added 3,200 jobs.

Simonson noted that the industry’s 13.5% unemployment rate was an improvement from the 17.0% rate of a year earlier but far above the all-industry rate of 9.1%.

“The drop in the industry’s unemployment rate clearly has more to do with workers leaving the construction industry instead of finding new jobs,” Simonson observed. “Losing so many seasoned workers will make it harder for the industry to bounce back when demand finally increases.”

Association officials warned that construction employment levels could rapidly decline again if Congress and the White House continue cutting vital construction programs. They urged officials to instead tackle out-of-control entitlement spending. They also urged leaders to quickly enact long-overdue highway, transit and aviation legislation that sets multi-year funding levels for a range of maintenance and repair programs.

“Cutting infrastructure programs will put tens of thousands out of work while hobbling our economy with aging infrastructure and crowded roads for decades to come,” said Stephen E. Sandherr, the association’s chief executive officer. “Anyone serious about creating jobs now and promoting private sector growth should have infrastructure investments as part of their jobs agenda.”

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