US construction employment increases in December despite industry pessimism

US construction employment increases in December despite industry pessimism

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US construction employment increased by 51,000 jobs in December, with gains for nonresidential as well as residential contractors, according to an analysis by the Associated General Contractors of America of government data. Association officials cautioned, however, that its latest survey shows widespread pessimism among contractors about the volume of work available in 2021, and they urged lawmakers to focus on measures designed to rebuild the economy and demand for construction.

“December’s employment gains likely reflect milder weather than usual for the month rather than sustained demand for projects,” said Ken Simonson, the association’s chief economist. “In fact, our survey found contractors expect the volume of work is likely to decline for nearly all nonresidential project types, and most firms have experienced project cancellations or postponements.”

Construction employment climbed to 7,413,000 in December, an increase of 0.7 percent compared to November. However, employment in the sector remains down by 226,000 or 3.0 percent since the most recent peak in February.

Residential construction has weathered the pandemic much better than nonresidential segments, Simonson added. While both parts of the industry had huge job losses from the pre-pandemic peak in February to April, residential building and specialty trade contractors have now recouped all of the employment losses they incurred. In contrast, nonresidential construction employment—comprising nonresidential building, specialty trades, and heavy and civil engineering construction—was 241,000 lower in December than in February.

Unemployment in construction nearly doubled in 2020. The industry’s unemployment rate in December was 9.6 percent, compared to 5.0 percent in December 2019. A total of 930,000 former construction workers were unemployed, up from 489,000 a year earlier. Both figures were the highest for December since 2013.

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