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After Years of Declines, Construction Employment Stable Since Early 2010; Declines in Public Sector Demand Likely to Drag on Employment Levels for Rest of Year, Economist Predicts

The construction industry added 5,000 jobs in April while the industry’s unemployment rate declined slightly to 17.8 percent, nearly twice the national average, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said the figures continue a year-long trend of little change in construction employment after years of steep declines and predicted the stagnation is unlikely to change soon.

“The construction industry may have stopped bleeding jobs, but there is no sign that employment levels are set to bounce back,” said Ken Simonson, the association’s chief economist. “With declines in public sector investments likely to offset increases in some private sector construction activity, we are unlikely to see significant increases in construction employment for the foreseeable future.”

The construction economist said the nonresidential construction sectors added 10,000 jobs in April, while the residential sector lost 5,400 jobs. The largest gains came from the heavy and civil engineering construction, likely reflecting the start of construction on a number of stimulus and other publicly funded projects that halted during the winter. Meanwhile, employment declined in both the nonresidential specialty trade contractors and the nonresidential building categories, possibly reflecting weak demand for office, retail and school construction.

Association officials said that construction employment is likely to remain relatively stagnant through much of 2011 as federal, state and local governments cut investments in infrastructure and other construction projects. They said that expected increases in multifamily, manufacturing and power construction would help offset the public sector declines, but might not be enough to lead to significant increases in construction employment.

“Construction will keep suffering double-digit unemployment rates as long as federal officials continue to cut infrastructure maintenance and upkeep instead of addressing out-of-control entitlement spending,” said Stephen E. Sandherr, the association’s chief executive officer. “The lesson here is you can’t neglect your way to greater economic prosperity.”