Construction Employment Grows in 194 of 339 US Metropolitan Areas

Construction Worker Mixing CementA recovery appears on the horizon, but we’re not back to the peak yet

The Associated General Contractors of America (AGCA) released information based on federal employment data information that points to an increase of construction employment in the majority of US metropolitan areas. The employment data study (which covers August 2012 to August 2013) refers to 57% of the nation’s 339 metropolitan areas seeing a relevant increase in construction employment. Of the 339 metropolitan areas, 17% saw no real change, and 26% saw a decline in construction hiring.

The immediate reaction to a majority of the nation seeing an increase in construction hiring is to assume that our nation is poised for a major comeback, but it is important to realize that the growth factor that we’ll see moving forward will be a slow, organic type of growth. In fact, more than 40% of the nation is seeing no increase, or an actual decline in construction employment. Officials are also quick to point out that of the 339 metropolitan areas, only 19 areas recognized a peak during the month of August in terms of construction hiring.

Where are we seeing the majority of movement – either good or bad?

Los Angeles, Boston, and Houston have all realized significant gains in both the number of jobs added, as well as the percentage of growth. Los Angeles added 8,900 jobs – equating to an 8% increase over the previous year. Boston added 8,700 construction jobs for a 16% increase, and Houston added 8,200 positions for a 5% increase. Areas of Mississippi and Wisconsin saw a 30%+ increase in construction employment figures, though the raw number of jobs added was less than more populated metropolitan areas. Fargo, North Dakota has seen a 25% increase – no doubt due in large part to the increasing demands of the energy industry in that region.

Areas of the nation that saw a decline in construction employment over the past twelve months are the Sacramento-Roseville corridor (a 12% loss, and 4,900 fewer jobs), Gary, Indiana (18% loss, 4,100 jobs lost), and the massive Riverside-San Bernardino, CA area (5% reduction, 3,400 jobs). These are all areas that were hit hard during the recession of the past five years, so recovery will be more deliberate. In fact, with the glut of housing inventories and minimal new commercial starts for these three areas, it may be several more years before any appreciable gains are seen.

The nationwide gains in employment are generally from increased demand for new homes and energy industry-related projects. North Dakota is a terrific example of an area that has seen a major boom in oil and natural gas production, and the infrastructure and housing projects that are required to support this economic windfall are providing more opportunities for those in the construction industry.

With a reduction in public works projects due to funding issues in many areas, construction jobs are shrinking. Those who relied on municipal improvement projects, public repair jobs, and other construction work that is tied to public funding have seen minimal growth, if any. While there are certainly areas of the nation that are seeing an increase in construction jobs, the national outlook is cautious yet optimistic. Some of the hardest hit areas will take more time to recover, while those locales that are tied to the energy industry will no doubt see an accelerated timeframe for growth.