Few cities across the country have been spared the widespread downturn in construction employment over the past year: Employment throughout all construction sectors declined in 333 out of 352 metropolitan areas in June 2009 compared to June 2008, according to the Arlington, Va.-based Associated General Contractors of America’s (AGC) analysis of recently released Census Bureau data. (Click here for a city-by-city construction employment list.)
“I wasn’t greatly surprised to find that there were only 10 metros that had any increase and nine others that broke even,” says Ken Simonson, AGC’s chief economist. “I’d say that it was pretty extreme to have so few examples of rising construction employment, but it is certainly consistent with the state-level data and with the depth of decline nationally.”
Nationally, construction employment fell by 14 percent from June ’08 to June ’09. Across all construction sectors, more than 200 metro areas suffered double-digit percentage declines in the past 12 months. The worse hit: Pascagoula, Miss., and Reno-Sparks, Nev., which both lost one out of every three construction jobs over the past year.
Nine metro areas saw no change in construction employment, while only 10 cities saw increases since June 2008. The Midwest led the list: Employment spiked 31 percent in Columbus, Ind., and 17 percent in Weirton-Steubenville, which is located along the West Virginia-Ohio border.
“Weirton-Steubenville was a surprise as that’s not been a strong market, and I wouldn’t expect the area to see sustained growth,” Simonson explains. “Columbus, Ind., is dominated by Cummins Engine Co, so if they are doing an extension of one of their plants, that could be enough to explain the increase.”
Meanwhile, multifamily accounts for only a small slice of the overall decline, though it’s likely feeling a significant amount of pain, Simonson says. LandSouth Construction, a Jacksonville Beach, Fla.-based multifamily general contractor, doesn’t expect construction employment to pick up anytime soon. "Most of our competitors and companies serving the construction industry have experienced cutbacks in employment," says Mike Taylor, the firm's director of business development. "We expect this trend to continue to decline in the short-term, albeit at a slower pace. The stimulus package has had little impact on construction employment to date. The financial markets, banking industry, and governmental regulators must continue to focus on increasing liquidity to the marketplace. In the long-term, construction employment will improve gradually as the demand for new housing construction increases and sources of capital become more available to developers."
If the continued downward spiral of multifamily construction spending is any indication, then multifamily firms can expect to have a decreased payroll for the foreseeable future. In June, year-over-year spending on new multifamily construction decreased by 33.1 percent, according to the Census Bureau. Additionally, multifamily starts continue to fall: In June, starts dipped more than 25 percent compared to May 2005. That’s a whopping 74.8 percent drop year-over-year.
