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First Significant Change in Construction Employment Levels Since February Driven Largely By Increases in Nonresidential Construction As Private Sector Demand Continues to Inch Up, Construction Officials Note

Construction employers added 26,000 jobs between August and September as the industry’s unemployment rate dropped to 13.3 percent, according to an analysis of new federal employment data released today by the Associated General Contractors of America. Association officials said the increase is the first significant change in construction employment levels since February and reflects growing private sector demand for nonresidential construction projects.

“These numbers give us a taste for how investing in construction activity can really boost overall employment figures,” said Stephen E. Sandherr, the association’s chief executive officer. “However, the real question is whether these numbers are an anomaly or the start of a positive trend.”

Total construction employment now stands at 5,551,000, compared to 5,514,000 in September 2010, a 0.7 percent increase. Association officials added that the bulk of the construction gains came from the nonresidential sector. Nonresidential building construction added 13,200 jobs in September while nonresidential specialty trade contractors added 10,700 jobs and heavy and civil engineering construction added 6,200. Meanwhile, residential building contractors added only 1,800 jobs while residential specialty trade contractors lost 5,600 jobs.

Sandherr noted that the industry’s 13.3 percent unemployment rate was an improvement from the 17.2 percent rate of a year earlier but far above the all-industry rate of 9.1 percent. He cautioned that much of the decline in the industry’s unemployment rate was caused by construction workers leaving the industry, as opposed to returning to the sector’s workforce.

Association officials cautioned that the increase in construction employment will be short-lived should Congress and the administration continue making cuts to infrastructure and construction programs. They noted that construction programs accounted for more than half of the fiscal year 2011 federal budget cuts and that Congress and the administration have yet to finalize aviation, surface transportation or water system legislation that expired years ago.

“With private sector demand inching back up, the construction industry is finally on the brink of recovering from years of hardship and job losses,” Sandherr said. “If Washington continues to cut infrastructure funding instead of addressing out of control entitlement spending, the industry will lose whatever momentum it picked up in September.”