Construction continues to struggle during pandemic

Industry has recovered only 59% of jobs lost since crisis began

Published August 7, 2020 by Sydney Lake

The nonresidential construction industry lost 4,000 jobs in July, as compared to June, the Associated Builders and Contractors (ABC) announced Friday. The construction industry as a whole, however, has added 639,000 jobs during the past three months — recovering approximately 59% of the jobs lost during the pandemic.

“For several weeks, contractors have noted an increase in project postponements and cancellations due to coronavirus impacts,” ABC Chief Economist Anirban Basu said in a statement. “July data reflect this reality, as many of the postponed or canceled projects are in categories such as office, lodging and retail.”

The construction unemployment rate was 8.9% in July, which is 5.1% higher than the same time last year.

The construction industry as a whole added 20,000 jobs on net during July, according to the ABC. The nonresidential building sector lost 9,300 jobs while nonresidential specialty trade contractors added 3,500 jobs and heavy and civil engineering added 1,800 jobs.

“At the same time, there appears to be a growing amount of work modifying existing structures,” Basu said in a statement. “That helps explain the 3,500 jobs created within the nonresidential specialty trade segment, which, among other things, encompasses workers who handle air handling systems.”

Basu warns, however, that the jobs added last month may not reflect coming months.

“The outlook for nonresidential construction spending is not especially favorable for the next year,” Basu said in a statement. “The pandemic remains stubbornly in place … [and] the pace of recovery has softened in conjunction with viral resurgence. Commercial real estate fundamentals are in tatters, with the pandemic set to leave behind many shuttered restaurants, empty storefronts and vacated office suites.

“While contractors maintain a healthy level of backlog, according to ABC’s Construction Backlog Indicator, the trajectory of nonresidential construction during the months ahead will depend heavily upon the nature of economic stimulus and the extent policymakers prioritize construction and infrastructure.”