Nonresidential jobs appear
to flatten but spending soars.
The unemployment rate climbed from 4.7% in November to 5.0%, the highest
level in two years.
Total construction employment fell
49,000 for the month to 7,489,000 and 195,000 (2.5%) over 12 months.
Residential building and specialty trades employment accounted for all the job
losses (from 3,344,000 to 3,150,000) and fell 5.8% over the year. Yet the BLS
numbers appear to understate the residential job loss. Census figures on
residential construction spending show a drop of 17.5% from November 2006 to
November 2007, and it seems likely that employment is down by a similar percentage,
implying a drop of 585,000 jobs, not 195,000. The difference may be the number
of specialty trade contractors whose companies formerly did residential wiring,
plumbing, concrete finishing, etc., but are now doing nonresidential work.
Adding those 390,000 jobs to the 4,339,000 nonresidential building, specialty
trade and heavy and civil engineering contractors counted by BLS would produce
a 12-month employment gain of 9%, a more plausible number than BLS’s zero
change in light of the 18% increase in nonresidential spending over the past
year. Such an increase would also help explain why average hourly earnings in construction rose 4.4% last year (to
$21.33 per hour), vs.3.7% for all private-sector production or nonsupervisory
workers. Architectural and engineering
services employment rose again in December and was up 3.9% for the year, a
positive sign for future nonresidential construction.