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Nonresidential Construction Job Growth Offsets Slump

Words: Dan KamysNonresidential construction employment grew again in October, contradicting beliefs that the housing slump is dragging down all construction, according to Ken Simonson, chief economist for the Associated General Contractors of America (AGC). Simonson was commenting on the Nov. 2 payroll employment report from the Bureau of Labor Statistics (BLS).

"Although total construction employment fell by 5,000 in October, seasonally adjusted, and 106,000 or 1.4 percent compared to October 2006, all of those losses occurred in homebuilding," Simonson said. "The BLS numbers show that over the past 12 months, employment in the three nonresidential categories, nonresidential building, specialty trades, plus heavy and civil engineering, climbed by 42,000 or 1 percent. At the same time, employment in residential building and specialty trades dropped by 148,000 jobs or 4.4 percent.

Simonson said the estimate greatly understates the actual difference, because the Census Bureau figures for September show residential construction spending was down 16 percent from a year before and nonresidential was up almost 17 percent.

"It's likely that residential employment is actually down roughly 16 percent," he said. "That means about 400,000 Ôresidential' specialty trade contractors are now doing nonresidential electrical, plumbing and other work. If these 400,000 workers were added to the nonresidential total, nonresidential would be up more than 10 percent to its payrolls, outpacing nearly every other industry. That's much closer to the 17 percent gain in nonresidential construction spending."
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