Plumbing and Mechanical

Aug. 3, 2007 - Jobs Report Understates Nonresidential Construction Gain

August 3, 2007

The Aug. 3 Bureau of Labor Statistics’ payroll employment report “appears to understate the contribution of nonresidential construction as a job creator,” according to Ken Simonson, chief economist for the Associated General Contractors of America. As the regular players in residential construction take advantage of plentiful commercial projects, miscounted workers seems to be a factor in the BLS report.

While total construction employment dipped in July (down 0.7 percent compared to the same time in 2006), nonresidential construction continues to grow, leaping 14 percent from June 2006 to June 2007. The BLS report shows job gains of only 1.5 percent in the past 12 months, which Simonson says shows a discrepancy due to mislabeling workers as “residential” specialty contractors.

“Industry contacts tell me there are many subcontractors doing commercial work who formerly concentrated on residential work,” Simonson says. If their companies use their former industry code, the workers will be miscounted.

The AGC expects nonresidential jobs to keep growing, as there are plenty of long-term projects underway. In addition, architectural and engineering services employment - a harbinger of future construction - rose 3.2 percent in the past 12 months.