Construction spending drops to six year
Construction employment grew in only
4 out of 337 metropolitan areas in 2009 as spending on construction
projects dropped by $100 billion in December to a 6-year low
of $903 billion, according to an analysis by the Associated General
Contractors of America.
“The impact of the stimulus is clearly being overshadowed by
the sweeping downturn in overall construction demand,” said Ken
Simonson, the association’s chief economist. “Without those public
investments however, a bad employment situation will only get
worse during 2010.”
Simonson noted new Census Bureau figures show that private non-residential
spending dropped 18 percent compared to December 2008. He added
that only power construction increased from year-ago levels,
by 14 percent. Developer-financed categories recorded especially
large declines, including lodging (down 46 percent); retail,
warehouse and farm (down 37 percent); and office (down 35 percent).
In contrast, publicly-funded construction increased by 1.0 percent
between December 2008 and 2009, Simonson noted. He added that
stimulus spending helped boost highway and street construction
by 3.7 percent, making it the largest public category. Educational
construction, however, dropped 4.0 percent during the year. Private
residential construction dropped 11 percent for the year as multi-family
construction tumbled, even though spending on single family housing
has increased for 7 months in a row.
Simonson said the declines in construction spending were leading
to layoffs in almost every community in America. Leominster-Fitchburg,
Massachusetts lost a larger percentage of its construction work
force (38 percent) during 2009 than any other metropolitan area,
according to the latest Bureau of Labor Statistics figures. The
agency includes mining and logging with construction in most
metro areas to prevent disclosure about industries with few employees.
Other areas experiencing sharp declines in construction employment
during the year include El Centro, California (36 percent); Santa
Fe, New Mexico; Pocatello, Idaho; and Kokomo, Indiana (all 29
percent). Meanwhile, the Houston, Texas area lost the most construction
jobs (25,500) between December 2008 and 2009.
Of the 4 metropolitan areas with an increase in construction
employment during the past 12 months, 2 areas had gains of more
than 100 jobs: Harrisburg-Carlisle, Pennsylvania (1,500 jobs,
13 percent gain) and Tulsa, Oklahoma (700 jobs, 3 percent gain).
Two metro areas had gains of 100 jobs each in construction: Springfield,
Ohio (8 percent) and Columbus, Indiana (5 percent).
Association officials cautioned that without new investments
in infrastructure projects, construction employment will only
get worse. They noted that the fiscal year 2011 budget request
released by President Obama outlines some important new infrastructure
investments, including establishing a national infrastructure
fund and boosting investments in high speed rail and new air
traffic control facilities. Many of those new investments, however,
were offset by cuts for new water infrastructure projects and
levee projects, for example.