The nonresidential construction industry in March saw its first monthly increase in employment since 2008, gaining 9,400 jobs on a seasonally adjusted basis, according to the April 2
employment report by the Department of Labor. Year over year, nonresidential construction lost 75,600 jobs or 10.1 percent of its workforce.
Overall, the construction industry posted its first gain since 2007, adding 15,000 jobs in March; however, overall construction employment is still down 701,000 jobs or 11.1 percent year over year. Total employment across all industries increased by 162,000 jobs in March, enough to keep the unemployment rate steady at 9.7 percent for the third consecutive month.
“For the most part, today’s jobs report should be considered good news,” said ABC Chief Economist Anirban Basu. “However, there are reasons to be skeptical in how this employment report relates to construction. After many months of consistent employment declines, a number of key nonresidential construction segments experienced job increases, but this is in part due to a return of construction activity in March after February’s disruptive storms.”
In contrast to the employment report, the February
construction spending report released April 1 by the U.S. Census Bureau had little good news for the construction industry. Private nonresidential construction spending declined 0.4 percent in February and is 24.3 percent lower than the same time last year. Total nonresidential construction spending was down 1 percent for the month and 16.2 percent for the year and total construction spending decreased 1.3 percent for the month and 12.8 percent over the past 12 months.
The spending report was consistent with
ABC’s Construction Backlog Indicator released in March that showed nonresidential construction backlog continues to decline nationally.
“In addition, developer-driven activities like lodging and commercial construction are still being hammered in an environment characterized by tight credit, rising vacancies and still-fragile consumer sentiment,” Basu said. “However, there is more to the report than meets the eye. February’s numbers were heavily influenced by weather events. It’s possible the data would have been less negative without the unusually strong storms that impacted the northeast.”