The Real Deal New York

Construction adds 5,000 jobs, but unemployment in sector rises sharply

October 05, 2012 01:00PM

Today brought with it a plethora of September jobs news. Nationwide, the economy added some 114,000 jobs, bringing the unemployment rate down to 7.8 percent, according to Labor Department statistics. And according to another new report, 5,000 of those jobs were added by construction employers.

But the Associated General Contractors of America also revealed an increase in the industry’s total unemployment rate: 11.9 percent unemployment — up from 11.3 percent in August. “Despite the slight uptick in construction employment for the past month, the industry is a bit smaller than it was one year ago,” said Stephen Sandherr, CEO of the association, in the release. “It appears that for every rebounding market segment, there is another one that is shrinking.”

In September, construction firms employed 5.523 million people — an increase from the 5.518 tallied in August. But despite the month-over-month increase, overall employment in the construction sector was 5,000 lower year-over-year. In fact, the industry now employs a total of 2.2 million fewer people than it did in 2006 when construction employment reached a peak of 7.7 million workers.

Broken down, the residential and non-residential sectors added jobs last month, but the non-residential sector posted a larger year-over-year loss. Residential and non-residential both added 1,100 jobs month-over-month. However, residential contractors added 3,200 jobs year-over-year while the non-residential side posted a 12,400 year-over-year loss.

As The Real Deal previously reported, new home starts reached a seasonally adjusted rate of 750,000 units in August, which was the highest number of starts since April 2010. In addition, home-building REITs thrived in the third quarter compared to apartment REITs.

The demand for residential and some commercial construction been offset by a decline in public-sector construction; in addition, two million workers have left the industry to retire or to find jobs in faster-growing sectors, which are not mentioned. — Zachary Kussin

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