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National construction employment numbers remain grim

By: Sue Vorenberg//March 2, 2011//

National construction employment numbers remain grim

Sue Vorenberg//March 2, 2011//

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Construction employment across the nation hit a 14-year low this winter, dipping to 5.455 million – down 29 percent from the peak in 2006 said Ken Simonson, chief economist for the Associated General Contractors.

And while some experts think the worst is over, don’t expect the recovery to come quickly, Simonson added.

“The numbers are down to just about the same place as they were last August,” Simonson said. “It’s scraping along the bottom. I still expect activity to pick up modestly in 2011, but it’s not going to be a smooth recovery.”

Oregon and the Pacific Northwest remain in the same general situation as the rest of the country, although he expects to have more specific details about the region when more detailed census and other localized data comes out later this month, he added.

“The weather has been so extreme for the last three months, with big snow storms and other events, that it’s hard to tell what’s really going on with demand,” Simonson said. “But the recession has definitely not ended yet for construction.”

Census data released Tuesday shows 22.5 percent unemployment in the industry nationally, which is more than any other sector, Simonson added.

Compounding the problems, materials costs are also continuing to rise, he said.

Prices for copper, aluminum and other metals have continued to rise, but oil is the biggest issue of concern right now, Simonson said.

With the growing unrest in the Middle East and Africa, oil prices have grown progressively more unstable – and that affects a number of materials, including trucking prices, asphalt, plastic pipes, insulation and tires, Simonson said.

“I’m getting concerned about what’s happening with those costs,” Simonson said. “Costs were rising anyway, but things became more pronounced when oil hit $100 a barrel.”

Things could stabilize if the political situations in countries in the region are resolved quickly, but if not prices could become even more erratic, Simonson said.

“As we see those problems grow from one region to another, we may see even more uncertainty,” he said.



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