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Leaving in Droves: Workforce Shortage Looms

“It is tough to attract and retain workers when employment gains are so spotty” noted AGC of Americas Chief Economist Ken Simonson. “With workers finding jobs in other industries retiring or returning to school contractors face a potential shortage of skilled workers in a year or two.”

Thats the bad news hiding within an otherwise slightly positive construction employment report by Simonson. The construction industry lost 2000 jobs in April following similar declines of 3000 in March and 1000 in February but still added 63000 jobs over the past year as the industry unemployment rate shrank to 14.5 percent—the lowest April level in four years according to an analysis of new federal employment data. AGC of America officials said that lack of long-term federal highway and transit funding along with other infrastructure budget cuts threatens to limit construction job growth.

“The plunge in the unemployment rate for former construction workers from 17.8 percent in April 2011 and 21.8 percent two years ago is good news for them” said Simonson. “Unfortunately few of them have found jobs in construction which actually employed 1000 fewer workers than it did in April 2010.”

Construction started losing jobs in 2006—more than a year before the rest of the economy—and did not touch bottom until February 2011 a year after other sectors Simonson pointed out. Even in the past year there have been construction job losses in half the months he said.

Association officials said that inadequate long-term funding for infrastructure investment is likely to undermine construction employment gains in coming months. They cited the lack of a multiyear federal highway and transit bill as a particular problem along with shrinking federal funding for a range of construction projects.

“Instead of hiring workers for desperately needed improvements to the nation’s transportation network contractors must wait to see if lawmakers pass more than a short-term no-increase highway and transit bill” said Stephen E. Sandherr AGC of Americas chief executive officer. “Meanwhile other federal appropriations for water wastewater and building infrastructure have been cut for two years in a row with further cuts likely making the jobs outlook even grimmer unless Congress passes adequately funded long-term bills now.”

Simonson noted that the 1.1 percent increase in construction employment over the past year was shared among all sectors of the industry. Employment among residential specialty trade contractors climbed by 33100 or 2.3 percent helped by a large increase in multifamily construction. Heavy and civil engineering employment rose by 18400 (2.2 percent) thanks to work on power energy and manufacturing projects. Nonresidential building employment increased by 6000 (0.9 percent) while nonresidential specialty trade contractors added 3900 employees as private hospital higher education warehouse and transportation work accelerated. Residential building construction mainly single-family homebuilding eked out a gain of 700 workers (0.1 percent) he said.

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