Construction Sector Experiencing Mixed Results In October
An analysis of government data by the Associated General Contractors of America showed an increase of 84,000 jobs in October. The association warned though that a growing number of of construction projects are being canceled or delayed. (Survey Here)
Despite the fact that total Construction employment grew to 7,345,000 jobs in October, up 1.2% from September, employment is down 3.9% or 294,000 jobs since February. Nonresidential construction including heavy and civil engineering construction remains 5.6% or 262,000 jobs below February levels. Residential construction has faired better down only 1.1% or 32,000 jobs.
There were significant differences in construction activity between states. Between February and October, New York lost the most construction jobs (-41,600 jobs or -10.1 percent), followed by Texas (-41,500 jobs, -5.2 percent). Vermont had the largest percentage loss (-21.8 percent, -3,200 jobs), followed by North Dakota (-13.2 percent, -3,900 jobs).
Thirteen states added construction jobs as well as the District of Columbia. Virginia added the most jobs (7,100 jobs, 3.5 percent), then Kentucky (4,300 jobs, 5.4 percent) and Alabama (4,300 jobs, 4.5 percent). South Dakota added the largest percentage gain (9.4 percent, 2,300 jobs), followed by Kentucky.
California added the most jobs between September and October (26,300 jobs, 3.1 percent), then Texas (9,400 jobs, 1.3 percent). The largest percentage gain for the month was in Alaska (10.1 percent, 1,500 jobs), followed by Iowa (7.0 percent, 4,700 jobs).
“The survey results make it clear that the months-long pandemic is undermining demand for projects, disrupting vital supply chains and clouding the industry’s outlook,” said Ken Simonson, the Associated General Contractors of America chief economist. “Without new federal relief measures, these challenges pose a significant threat to current construction employment levels.” *
The association’s October survey included responses by over one thousand contractors in residential and non-residential construction. Three quarters of them reported that a project had been canceled or postponed. Overall they reported more cancelations than starts.
Industry groups are still hoping congress will pass another stimulus package before the end of the year. Additional investment in infrastructure, liability reforms and new Paycheck Protection Program flexibility and tax relief could help offset impacts of the growing number of project delays and cancelations.
“Congressional leaders understand that employers cannot afford to wait until next year for relief from the broad economic impacts of the coronavirus pandemic,” said Stephen E. Sandherr, the association’s chief executive officer. “We stand ready to work with Congress to make sure any new relief measures include new infrastructure investments, tax relief and liability reform so honest firms don’t fall victim to predatory lawyers seeking to profit from the coronavirus.” *
Whether a lame duck congress will take the initiative is partly dependent on industry professionals activism. If a deal is reached before the end of this year, it’s likely to be much smaller than previous stimulus packages. Senate Majority Leader Mitch McConnell has indicated that he backs another stimulus package but it seems he wants to keep it in the range of $500 Billion instead of the $2 trillion sought by Democrats.
Now might be a good time to reach out to your representatives to make sure they are motivated to act to protect this essential industry and the overall economy with more financial stimulus.
