The biggest hole in employment in places such as Nevada, Florida and Arizona comes from the loss of construction jobs. The same is true in Washington state.
Yes. Even though we weren’t an epicenter of overbuilding and real-estate speculation, Washington has lost about 69,000 construction jobs from February 2008 through October. Last month, 400 jobs were shed. Washington eked out 1,900 net new private-sector jobs in October, its fifth monthly gain, but none of them was in construction.
State chief economist Arun Raha said it “is by far the largest sector in job loss.”
Given the Great Recession’s roots in construction financed by a historic bubble, the job losses aren’t surprising. The federal stimulus, part of which went to “shovel-ready” projects such as road work and school construction, helped preserve some jobs. But the stimulus is winding down and with five unemployed Americans chasing every open job, the prospects for many former construction workers is bleak, even with retraining.
Nationally, the industry’s unemployment rate is more than 17 percent, according to the Associated General Contractors, a trade group. Construction spending barely budged in September, up 0.5 percent nationally, but — and here the waning stimulus shows — down 10.4 percent from the same month in 2009. Vacancy rates remain high in the commercial sector, a huge overhang of unsold houses holds back residential and both are dogged by debt.
Raha predicts the first growth in construction jobs to come next May. “Very minimal,” he said. He expects residential projects to recover more quickly than commercial. Overall? “We’re bottoming out.”
Perhaps, but the construction boom isn’t coming back. And lacking a visionary, but politically impossible, New Deal 2.0 stimulus that invested in infrastructure, many construction workers may never get back on the job.
Today’s Econ Haiku:
GM and Conrail
Show the government can roll
The sun came up, too