Summary 

In a month when the private sector added the most jobs in five years, the construction industry experienced modest gains, adding 5,000 jobs in April according to the May 6 employment report by the Labor Department. Still, the construction industry has lost 42,000 jobs, or 0.8 percent compared to one year ago, and the unemployment rate for April now stands at 17.8 percent, down from 20 percent in March and down from 21.8 percent the same time last year.

Nonresidential building construction employment now stands at 656,800 jobs as the sector lost 1,200 jobs for the month and 18,400 jobs or 3.2 percent over the last year (see graph below). Heavy and civil engineering construction added 12,700 jobs in April and has added 21,300 jobs, or 2.6 percent, year-over-year. Specialty trade contractor employment slipped by 4,800 jobs last month and has lost 35,100 jobs, or 1 percent, over the past twelve months. Residential building construction employment decreased by 2,100 jobs in April and has lost 18,400 jobs or 3.2 percent compared to April 2010.

Overall, the nation added total 244,000 jobs in April as the private sector gained 268,000 jobs and the government lost 24,000 jobs. Year-over-year, the nation has added 1,313,000 jobs, or 1 percent. The national unemployment rate grew to 9 percent in April.

“Today's employment numbers were very positive,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The nation added more private sector jobs in April than in any month since February 2006.

“Unfortunately, the U.S. construction sector was not a major participant in the April job growth story,” said Basu. “The sector added only 5,000 jobs in April after adding 2,000 jobs in March. More than 100 percent of the job growth in construction was explained by the growth in heavy and civil engineering. In contrast, many key construction segments lost jobs last month including specialty trade contractors, nonresidential building and residential building.”

“There are a number of factors to explain the construction industry’s ongoing underperformance, including still disciplined lending standards, high vacancy rates, and skittishness among investors,” Basu said. “Shrinking state and local government capital budgets are also likely playing a role, particularly in categories such as public safety-related construction and education-related construction.

“Despite the ongoing disappointment stemming from the construction employment numbers, the industry's outlook continues to improve,” said Basu. “Privately financed construction is still poised to stabilize later this year or early next year. That should allow construction to participate more forcefully in the broader economic recovery. However, future job gains will likely be suppressed as federally funded stimulus project continued to wind toward a close.”