AGC: Torrid Construction Job Growth Leads Employment Gains

Tue December 27, 2005 - National Edition
Construction Equipment Guide

“The construction industry again outpaced the overall economy in adding jobs in November,” said Ken Simonson, chief economist of the Associated General Contractors of America (AGC), a national construction trade association. “Today’s report from the Labor Department showed that the industry accounted for 37,000 new jobs out of 215,000 added nationwide.

“A small piece of the gain, primarily in heavy and civil engineering, is attributable to reconstruction after the devastation caused by Hurricanes Katrina and Rita,” Simonson said. “But the industry added 32,000 jobs in August, almost as many as before Katrina hit. In fact, state employment data released 10 days ago show that Louisiana and Mississippi lost 32,000 construction jobs between August and September and regained only 6,000 in October.

“Over the past year, the industry has added 296,000 workers, an increase of more than four percent from the November 2004 total. That torrid growth compares to a tepid 1.5 percent rate of increase for the overall economy,” noted Simonson.

“All segments of construction are sharing in the gains,” Simonson added. “Over the past year, employment in residential specialty trade contractors and heavy and civil engineering construction grew six percent, residential building construction employment grew four percent, and nonresidential specialty trades and building construction rose three percent and two percent, respectively.”

Simonson predicted, “I believe conditions remain favorable for strong job growth in several types of nonresidential construction next year. Rapid house price appreciation means that school districts and local governments that fund construction through property taxes will have more to spend, as will states with unexpectedly large income and sales tax receipts.

“On the private side, factory, hospital, and some retail construction should be especially hot. Even residential construction should stay strong in at least the early months of 2006, judging by the latest report on record new-home sales.

“The one big worry is cost and availability of materials,” Simonson concluded. “AGC urges the Commerce Department to address one especially critical material by ending the unacceptable duty on Mexican cement, which pushes its price up 55 percent.”

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