Construction Job Losses Persist as Public Construction Spending Plunges

Message opposed to unemployment.

The U.S. economy may be creating jobs, but not all sectors are sharing in the success. The nation’s unemployment rate fell to 4.3% in July after rising to 4.4% in June. The unemployment rate in construction, on the other hand, was up slightly at 4.9%, while the number of unemployed with construction experience was also up.

Last year at this time, the unemployment rate in construction was 4.5% and the number of job seekers with construction experience was 410,000. It’s doubtful those numbers are going to improve in the near term.

Even though construction employment, not seasonally adjusted, rose from June 2016 to June 2017 in 74% of the 358 metro areas the Bureau of Labor Statistics provides data for, construction employment fell in 57 (16%) metro areas and was flat in 37.

Those areas experiencing the largest job losses have been struggling for a while. Oil dependent Houston-The Woodlands-Sugar Land reported the largest number of construction job losses at 5,200, or two percent. This was followed by the Middlesex-Monmouth-Ocean, New Jersey division with 2,900 (seven percent) job losses. In St. Louis Missouri, 2,600, or four percent of all construction jobs were lost.


Some smaller regions in the U.S. experienced an especially large percentage of job losses. In Grand Forks, North Dakota-Minnesota, 21% (1,000) of construction jobs were lost. This was followed by Danville, Illinois, where 17% (100) of construction jobs disappeared, and Casper, Wyoming, where 12% (400) of construction jobs vanished.

Part of the decline in construction jobs can be attributed to the lack of construction spending in the public sector. Public construction fell 5.4% in June and was down 9.5% year-over-year. The three segments that experienced the biggest declines were highway and street construction, down 8.1% year-over-year, educational construction, which tumbled 7.3%, and transportation (transit, passenger rail, ports and airports), which slipped 3.9%.

Spending on food store construction has chilled, falling 27% from a seasonally adjusted rate of $4.1 billion at the start of the year to $3.0 billion in June. Kroger Co (NYSE:KR), the country’s largest traditional supermarket chain is reducing its new store openings in 2017 to 55 from 100. That translates into a nearly $1.0-billion drop in capital expenditures.

Commerce, California-based Smart & Final Stores Inc (NYSE/SFS) expects to open 19 stores in 2017; in 2016, the firm opened 37 stores. Even Wal-Mart Stores Inc (NYSE:WMT) is putting on the brakes, with plans to build 55 supercenters and smaller-format stores in its 2018 fiscal year. For comparison, the company opened 132 stores in the 12-month period that ended in January.



The Employment Situation, July 2017,” Bureau of Labor Statistics, August 4, 2017.

Simonson, K., “July headcount edges up after June gains in 3/4 of metros; outlays fall, especially public,” Construction Citizen, August 7, 2017.


Categories: Job Cuts, News