Spokane Journal of Business

Construction employment, spending hit three-year high

Data suggest industry added nearly 100,000 jobs since September

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Revised government data issued last month show the construction industry is contributing substantially to economic and employment growth, according to an analysis by the Associated General Contractors of America.

Association officials note that construction employment rose for the eighth consecutive month in January, while construction spending in December increased for the ninth month in a row. Both totals were the highest levels in more than three years.

"The new employment data show the industry lost even more jobs in the recession than previously estimated but has added almost 300,000 jobs in the past two years, including nearly 100,000 since September," says Ken Simonson, the association's chief economist. "Meanwhile, the steady rise in construction spending since last March suggests contractors will be hiring even more workers in the months ahead."

Construction firms employed about 5.7 million people in January, a gain of 28,000 from December and 102,000, or 1.8 percent, from a year ago, Simonson says. The industry unemployment rate, which isn't seasonally adjusted and thus is typically high in January, fell from 17.7 percent in January 2012 to 16.1 percent last month.

Both residential and nonresidential construction added jobs for the month and year. Residential construction—building and specialty trade contractors—added 14,500 jobs in January and 53,200, up 2.6 percent, over 12 months. Nonresidential construction—building, specialty trade, and heavy and civil engineering firms—expanded by 13,700 employees in January and 48,900, up 1.4 percent, compared with the year-earlier level.

Construction put in place totaled $885 billion in December, the most since September 2009 and a pickup of 0.9 percent from November and 7.8 percent compared with December 2011. Private residential construction spending jumped 2.2 percent for the month and 24 percent year over year.

Private nonresidential spending grew 1.8 percent and 7.6 percent, respectively.

Those increases more than offset a plunge in public construction spending of 2.6 percent for the month and 17 percent over 12 months.

"We are likely to see continued strong growth in single- and multifamily home building, moderate increases in private nonresidential construction, and shrinking public investment levels for the next several months," Simonson says. "Those trends, in turn, will lead to a steady increase in the number of construction jobs."

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