Construction Unemployment Rates Improve in 26 States Year-Over-Year

WASHINGTON, D.C., Jan 31.—December not seasonally adjusted (NSA) construction unemployment rates were down in 26 states and the nation on a year-over-year basis, according to analysis released today by Associated Builders and Contractors (ABC). The rates for two states, Iowa and Wisconsin, were unchanged from December 2015. The national NSA construction unemployment rate of 7.4 percent was down 0.1 percent from a year ago, according to data from the U.S. Bureau of Labor Statistics (BLS).

The national NSA construction unemployment rate has fallen from the previous year’s reading every month since October 2010. Since these industry-specific rates are not seasonally adjusted, it is most accurate to evaluate the national and state-level unemployment rates on a year-over-year basis.
“The ongoing year-over-year decline in the national unemployment rate is an indication of the health of the construction job market and its recovery from the deep recession it experienced,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “However, the growing shortage of skilled construction workers is hindering the ability of the sector to grow with more than 80 percent of Associated Builders and Contractors members reporting a shortage of appropriately skilled labor.”
This was the lowest national December NSA construction unemployment rate since December 2006 when the rate was 6.9 percent. Meanwhile, BLS data showed that the industry employed 97,000 more people than in December 2015.

The usual pattern for the change from November to December is an increase in the national NSA construction unemployment rate. Starting in 2000, when the BLS data for this series begins, the December rate has risen every year. This year’s 1.7 percent rate increase was no exception.

Only two states—Arizona and Hawaii—posted a decline in their estimated NSA construction unemployment rates from November.

View states ranked by their construction unemployment rate
, their year-over-year improvement in construction unemployment, their monthly improvement in construction unemployment and a regional breakdown of states' construction unemployment rates.

The Top Five States
The states with the lowest estimated NSA construction unemployment rates in order from lowest rate to highest were:

1.    Massachusetts
2.    Colorado
3.    Hawaii
4.    New Hampshire
5.    Virginia

Three states—Colorado, Massachusetts and New Hampshire—were also among the top five in November. Massachusetts posted the lowest construction unemployment rate for the second month in a row at 3.5 percent, its lowest December rate on record. Colorado had the third best monthly change and had the second lowest industry unemployment rate at 3.8 percent. Hawaii was one of only two states with a monthly decline (down 0.7 percent) and climbed from 14th lowest to third with a rate of 4 percent. New Hampshire saw the sixth best year-over-year improvement, with its rate dropping 1.5 percent to 4.7 percent, the fourth lowest rate. Virginia posted the fifth lowest rate at 5.1 percent.

The Bottom Five States
The states with the highest NSA construction unemployment rates in order from lowest to highest rates were:

47.    Alabama and New Mexico
48.    Montana
49.    Illinois and North Dakota
50.    Alaska

Four of these states—Alaska, Alabama, Illinois and New Mexico—were also among the five states with the highest construction unemployment rates in November. Alaska had the highest estimated NSA construction unemployment rate for the fourth month in a row at 16.8 percent. Since the rates are NSA it is typical for Alaska to be among the highest rates in the nation around this time of year, however, the state has saw a 2.4 percent year-over-year increase in its industry unemployment rate. Illinois and North Dakota had the second highest construction unemployment rate in December—12.8 percent. Illinois’ ranking did not change from November while North Dakota had both the biggest year-over-year and monthly jump in its December rate, up 4 percent and 7.7 percent, respectively, dropping its ranking from 16th lowest in November. Montana had the fourth highest rate in December, 11.6 percent and had the second largest monthly increase in the country at 5 percent. Alabama and New Mexico had the fifth highest construction unemployment rate in December, 11.1 percent. Both states tied for the second highest rate in November and Alabama had the third largest year-over-year increase in its rate, up 1.3 percent.

To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates.