Construction Employment Plummets

Staff Writer, Feb 09, 2009

In today's tough economic times, it's no wonder that some markets are losing a large percentage of their labor force.  Construction, in particular, has recently lost 6800 jobs in December of 2008, according to the United States Labor Department findings.  This increase is labor loss is just a part of the overall loss of 53,400 jobs in the nonresidential building construction market in the entire year of 2008.

The Associated Builders and Contractors stated that this job loss is the worst result since 1991.

But this is only the beginning of the construction market woes.  In 2008, residential building construction dropped 120,400 jobs, while December alone showed a loss of 19,200 jobs, or over 15% of the total for the year.  If one looks into the specialty trade contractors, this market is also suffering.  In December of 2008, the sector saw a drop of 101,000 jobs – which is the larger drop since 1974.

When all was said and done in 2008, the market lost 8.5% of all jobs, which translates to about 632,000 lost jobs.  This is a mirror reflection of the rest of the market woes – as the economy falters, the confidence in renovations and new building simply diminishes.  Investors hold their breath, trying to wait out the economic storm.

As the economy has fallen, the demand for new buildings has consistently dropped, leaving contractors and skilled laborers without any work.  To add insult to injury, the rising costs of many construction projects has also led to projects being stopped in the middle of work.  In terms of residential housing, there were fewer homes built in the entire year of 2008, which left those skilled workers out of work.

When the market begins to sink like this, there are fewer new homes being built, which leads to potential shortages of homes on the market.  If a shortage does occur, this can lead to higher housing prices, which no one can afford during a difficult economic time.  The entire situation becomes a vicious circle with little hope until businesses are confident in building projects again.

What's worse is that future jobs are also up in the air.  Since the market takes its time to rebound and businesses may be hesitant to build anything new for a while, construction job losses may continue – and the cycle may not move upwards for two to three years.  Hopefully, with the new administration, this upward trend may begin more quickly than it is projected to begin.