US construction employment down, sector’s unemployment rate stays above 20 percent

"Growing stimulus activity was clearly offset by weak private sector demand and diminished state and local construction budgets last month," said Ken Simonson, the association's chief economist. "Unfortunately, construction employment is likely to remain both relatively low and unstable until at least early 2011."

Construction employment declined from 5,626,000 to 5,591,000 between April and May 2010, Simonson noted. Meanwhile the construction unemployment rate, which is not seasonally adjusted, actually 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 noted 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 earlier this week, association officials noted 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 noted, 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.