California construction employment declines 3.8% in year: Supply shortages and an materials price inflation could thwart recovery

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California”s construction employment has declined 3.8 percent in the past 12 months, reflecting the impact of the COVID-19 pandemic on the industry, according to an analysis by the Associated General Contractors (AGC) of America of government employment released on March 26. While employment numbers gained slightly — 600 or .01 per cent from January this year to February, there are clouds on the horizon with supply chain problems and soaring material prices, AGC reports.

Overall, the state ranks 29th in pandemic job losses, with an overall job loss of 35,000 — from 913,300 to 877,700. (At the height of the pandemic last April, employment declined to 738,600).

“Today’s figures show most states are still far from recovering the construction jobs lost a year ago,” said Ken Simonson, the association’s chief economist. “The overall economy is recovering, but huge price spikes and ever-lengthening delivery times threaten to set construction back further.”

Nationallly, AGC’s new inflation alert documents a wide variety of materials undergoing steep and frequent price increases and delivery delays, Simonson noted. This combination threatens to hold up the start or completion of numerous projects and add to the downward pressure on construction employment, the economist warned.

Seasonally adjusted construction employment in February 2021 was lower than in February 2020—the last month before the pandemic forced many contractors to suspend work—in 44 states and the District of Columbia. Texas lost the most construction jobs over the period (-56,400 jobs or -7.2 percent), followed by New York (-41,100 jobs, -10.1 percent), California (-35,000 jobs, -3.8 percent), Louisiana (-20,400 jobs, -14.9 percent), and New Jersey (-18,200 jobs, -11.1 percent). Louisiana experienced the largest percentage loss, followed by Wyoming (-14.0 percent, -3,200 jobs), New Jersey, New York, and West Virginia (-9.3 percent, -3,100 jobs).

Only six states added construction jobs from February 2020 to February 2021. Utah added the most jobs (6,700 jobs, 5.9 percent), trailed by Idaho (4,500 jobs, 8.2 percent) and Arkansas (900 jobs, 1.7 percent). Idaho added the highest percentage, followed by Utah and Arkansas.

From January to February, 35 states lost construction jobs, 11 states added jobs, and there was no change in D.C., Idaho, Oregon, Rhode Island, and Vermont. New York had the largest loss of construction jobs for the month (-15,600 jobs or -4.1 percent), followed by Indiana (-6,100 jobs, -4.1 percent), Illinois (-5,600 jobs, -2.6 percent), and Iowa (-5,500 jobs, -6.9 percent). Iowa had the largest percentage decline, followed by Kansas (-4.9 percent, -3,100 jobs), New York, and Indiana. Utah added the most construction jobs and the highest percentage over the month (3,000 jobs, 2.5 percent), followed by South Carolina (2,200 jobs, 2.1 percent).

Association officials called on the Biden administration to roll back tariffs on a range of key construction materials, including lumber and steel, that are contributing to the price spikes. They also urged the administration and Congress to work together to find ways to ease shipping delays that are undermining established supply chains. This could include providing temporary hours-of-service relief and looking at ways to expand port capacity.

“The coronavirus has wreaked havoc on many supply chains, but some of the price increases are the result of misguided policy decisions, including tariffs,” said Stephen E. Sandherr, the association’s chief executive officer. “Cutting tariffs and addressing shipping delays will give a needed boost to many firms struggling to get back to pre-pandemic business and employment levels.”

View state February 2020-February 2021 and and January-February . View AGC’s Inflation .

 

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