California construction employment still struggles during COVID-19 pandemic economic recovery

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California’s construction employment market is still struggling from the COVID-19 disruption, even as pandemic restrictions are lifted.

Overall, the state lost 1,600 construction jobs between April and May 2021, according to  government employment data reviewed by the Associated General Contractors (AGC) of America. The 0.2% loss makes the state ranks the state 14th in the nation. The picture from the start of the pandemic is even more disturbing, with an overall 3.4% loss (30,800 jobs) between February 2020 and May 2021, ranking the state 35th in the nation.

Nationally, construction employment in May remained below the April level in 40 states and the District of Columbia, AGC reported. Association officials said skyrocketing materials prices and excessive delays in receiving key construction supplies were holding back the industry’s recovery.

“Today’s numbers show that impacts from the pandemic on demand for projects and on materials costs and the supply chain are weighing down construction in most parts of the country,” said Ken Simonson, the association’s chief economist. “In the few states where industry employment has topped the pre-pandemic levels of February 2020, most gains are likely attributable more to demand for homebuilding and remodeling than to most categories of nonresidential building and infrastructure projects.”

From April to May, construction employment decreased in 40 states and D.C., increased in only eight states, and held steady in Maryland and Utah. The largest decline over the month occurred in New York, which lost 5,900 construction jobs or 1.6 percent, followed by Illinois (-5,600 jobs, -2.5 percent) and Pennsylvania (-3,300 jobs, -1.3 percent). The steepest percentage declines since April occurred in Vermont (-3.9 percent, -600 jobs), followed by Maine (-3.5 percent, -1,100 jobs) and Delaware (-3.0 percent, -300 jobs).

Employment declined from the pre-pandemic peak month of February 2020 in 42 states and D.C. Texas lost the most construction jobs over the period (-49,100 jobs or -6.3 percent), followed by New York (-45,200 jobs, -11.1 percent) and California (-30,800 jobs, -3.4%). Wyoming recorded the largest percentage loss (-15.3 percent, -3,500 jobs), followed by Louisiana (-15.1 percent, -20,700 jobs) and New York.

Among the eight states that added construction jobs since February 2020, the largest pickup occurred in Utah (5,000 jobs, 4.4 percent), followed by Idaho (3,400 jobs, 6.2 percent) and South Dakota (1,200 jobs, 5.0 percent). The largest percentage gain was in Idaho, followed by South Dakota and Utah.

Association officials noted that cost increases and extended lead times for producing many construction materials are exacerbating a slow recovery for construction. They urged the Biden administration to accelerate its timetable for reaching agreement with allies on removing tariffs on steel and aluminum, and to initiate talks to end tariffs on Canadian lumber.

“Federal officials can help get more construction workers employed by removing tariffs on essential construction materials such as lumber, steel and aluminum,” said Stephen E. Sandherr, the association’s chief executive officer. “These tariffs are causing unnecessary harm to construction workers and firms, as well as to the administration’s goals of building more affordable housing and infrastructure.”

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