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Little Strength Seen in Regional Construction Employment

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Although U.S. construction employment hit a two-year high in January, it remains below peak levels in 329 out of 337 metro areas, including Chicago-Joliet-Naperville, Ill, where employment has declined by 35 percent since peaking at 187,200 jobs in 2001, according to data compiled by the Arlington, Va.-based Associated General Contractors of America (AGC).

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On a percentage basis, job losses in the Chicago-Joliet-Naperville area were the fourth worst in the nation, behind Phoenix-Mesa-Glendale, Ariz.; Riverside-San Bernardino-Ontario, Calif.; and Las Vegas-Paradise, Nev.

Year-over-year data present a mixed picture for the Midwest, with Illinois, Ohio and Indiana showing employment gains from December 2010 to December 2011 and Missouri and Wisconsin showing losses, according to federal employment data.

Indiana showed particular strength, adding 13,600 jobs year-over-year for a 12.1% gain, the second-highest rate increase in the nation. While Indiana's economy is growing at only a modest pace, the state and its builders are benefiting from strong momentum in exports, which rose 11 percent in the third quarter due to growing demand for transportation equipment, according to a State Monitor report released last week by BMO Capital Markets.

Construction employment gains were more modest in Illinois and Ohio, which added 3,400 and 5,200 jobs, respectively.

AGC Chief Economist Ken Simonson expects private non-residential construction spending to grow  4% to 8%  nationwide this year, led by increased spending for power, pipelines, warehouses and manufacturing facilities. He estimates that public non-residential spending will decline by 8% to 12%, with losses steepest among public buildings, schools and universities.

Despite positive trends, AGC does not expect U.S. construction to recover until at least 2013.

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