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Construction employment drops in May, 35,000 workers lose jobs

A construction crew works on a bridge site in San Diego last week. Despite the biggest rise in construction spending in nearly a decade, 35,000 construction workers still lost jobs in May, according to a report from the AGC. (AP Photo/Gregory Bull)

A construction crew works on a bridge site in San Diego last week. Despite the biggest rise in construction spending in nearly a decade, 35,000 construction workers still lost jobs in May, according to a report from the AGC. (AP Photo/Gregory Bull)

Construction employment declined in May as 35,000 workers lost jobs, offsetting most of the increases the industry experienced in March and April, according to a new analysis of federal employment figures by the Associated General Contractors of America.

The figures show how fragile the sector is despite recent increases in stimulus funding activity, association officials noted.

Construction employment declined from 5,626,000 to 5,591,000 between April and May, AGC Chief Economist Ken Simonson said. Meanwhile, the construction unemployment rate, which is not seasonally adjusted, declined from 21.7 percent to 20.1 percent during the same time period.

With more than 1.7 million construction workers unemployed, however, Simonson said that the industry’s unemployment rate was still more than double the national rate and was the highest May rate since the series began in 1976.

Nonresidential construction employment was particularly hard-hit in May, accounting for 28,100, or more than four out of five, of the jobs lost in construction last month. Citing construction spending figures released last week, association officials said that developer-financed construction investments — including office, retail and multi-family residential — are down significantly this year.

Given high vacancy rates, private sector construction demand is likely to remain weak for many more months, association officials said, adding that state and local construction demand would remain soft for even longer considering the budget shortfalls for most state and municipal governments. They urged Congress and the Administration to take advantage of low construction costs by acting on long-stalled infrastructure bills, such as the six-year surface transportation legislation.

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