Construction's December unemployment rate worsened to 20.7% from November's 18.8%, but improved over December 2009's 22.7% mark, the federal Bureau of Labor Statistics reported this morning.

That marks the third-straight monthly year-over-year improvement in this closely watched indicator of the industry's vital signs.

The bureau's unemployment rates for construction and other industries do not reflect seasonal variations. Construction is highly seasonal--its jobless rates tend to rise in the late fall and winter months as the volume of projects declines.

Thus, the year-over-year improvement in the industry's unemployment rate is a modestly positive note.

But a worrisome sign is that
the industry lost a further 16,000 jobs in December. That measurement is seasonally adjusted and therefore the downturn cannot be attributed to construction's usual fall and winter slowdown.

Moreover, nearly all construction sectors showed job losses for the month, with the heavy/civil construction segment posting 12,700 positions lost.

The only bright spot was residential specialty trade contractors, which gained 4,100 jobs in December.

Construction-industry economists worry about the jobs impact of the waning of federal construction funding from the 2009 stimulus act. The measure's tens of billions of dollars for infrastructure projects are credited with preserving or creating hundreds of thousands of construction jobs.

Ken Simonson, the Associated General Contractors of America's chief economist, says, “At this point, it doesn’t look like there's anything to replace the temporary help that the stimulus has been providing for the construction industry."

Anirban Basu, the Associated Builders and Contractors' chief economist, says that "the construction sector is poised to underperform in the year ahead due to a number of factors, including dwindling direct impact from stimulus spending and the ongoing malaise in commercial real estate,”

Simonson and Basu both note that heavy-civil construction--one of the sectors most affected by the stimulus program--had added jobs in most of 2010, but then showed losses in November and December.
Another negative in the BLS report was that construction still has the highest unemployment rate among major U.S. industries. Agriculture recorded the second-highest rate in December, with 18.1%.

On the positive side, BLS reported that the overall national jobless rate improved to 9.4% in December, from November's 9.8%.

Construction Unemployment Rate (in percent)


December   20.7

November: 18.8

October: 17.3

September: 17.2

August: 17.0

July: 17.3

June: 20.1

May: 20.1

April: 21.8

March:  24.9

February: 27.1

January: 24.7


December:   22.7

November: 19.4

October: 18.7

September: 17.1

August: 16.5

July: 18.2

June: 17.4

May: 19.2

April: 18.7

March: 21.1

February: 21.4

January: 18.2

Note: Rates are not seasonally adjusted.

Source: U.S. Dept. of Labor Bureau of Labor Statistics