More than manufacturing, more than real estate, the construction industry has had the most jobs swallowed up since the recession and weak recovery. Just how much damage has been done? Almost 2.4 million construction jobs vanished from 2007-2012 — that’s 24% of what was the sixth-largest sector in the United States (and now is the eighth-largest).
Those are humbling numbers, but consider this: From 2001-2006, construction was the fastest-growing sector in the U.S., after much-smaller mining and private educational services, with 15% jobs added. Not even health care, at 14% growth, was keeping pace.
Huge growth, even more decline. That’s the big picture for the construction industry looking at the last decade. But the reality is that prospects for the construction industry have been a bit better of late — something that’s borne out in EMSI’s most recent dataset (2013.1), as well as by other indicators.
Housing starts and building permits were up significantly in February compared to February 2012, and the severe job losses seen industry-wide have started to abate in many states.
The table below examines the performance of construction in three time frames — 2001-2006, 2007-2009 (a period that roughly reflects the recession), and 2010-2012. There are a few clear gainers, and a large host of states in overall poor shape. Yet a few states are starting to stabilize after years of intense job loss.
The Biggest Gainers
Eight states had at least 1,000 more construction jobs in 2012 than they did in 2001. The biggest gainer at a time of huge loss (the industry has 1.1 million fewer jobs nationwide over this time) is Texas, which added an estimated 83,635 jobs, or 11% of the state’s total.
North Dakota is far and away the biggest percentage winner; construction there is up 65% since 2001 and 23% since 2010. Driven by the oil and gas boom, North Dakota now has 35% more construction jobs per capita than the national average (a location quotient of 1.35), after having 10% fewer jobs than the nation per capita in 2007.
Meanwhile, Hawaii, Oklahoma, Montana, and the Washington, D.C. have also done relatively well.
State2001 Jobs2012 Jobs2001-12 Job Change2001-06 % Change2007-09 % Change2010-12 % ChangeTexas743,314826,94983,63510%-5%6%North Dakota19,50132,15812,65716%7%23%Hawaii31,01738,3647,34754%-17%-1%Oklahoma94,13999,0234,88410%-1%-2%Montana31,62034,2042,58438%-23%3%District of Columbia13,38715,3912,0049%-7%23%Iowa84,58686,4621,87617%-8%3%Louisiana155,232156,2721,04010%-4%-1%Source: QCEW Employees, Non-QCEW Employees & Self-Employed - EMSI 2013.1 Class of Worker
The So-So States
Seven states are in the middle range — not suffering like the states below, but definitely not doing as well as the likes of Texas, North Dakota, and Oklahoma. Notice that all these are sparsely populated states.
State2001 Jobs2012 Jobs2001-12 Job Change2001-06 % Change2007-09 % Change2010-12 % ChangeWyoming23,65024,20155120%-10%-8%South Dakota24,44924,91146216%-3%-4%Alaska20,95120,415-53621%-8%-8%Vermont23,98823,276-71216%-15%5%Nebraska57,59156,168-1,4236%-6%4%West Virginia44,66642,227-2,43914%-11%0%New Hampshire42,94340,182-2,76117%-15%3%Source: QCEW Employees, Non-QCEW Employees & Self-Employed - EMSI 2013.1 Class of Worker
The Bottom
As you’ll tell from the size of this table, the vast majority of the U.S. has been rocked by the housing crash, credit squeeze, and other factors that went into the construction industry’s decline. The hardest-hit states have been Nevada, California, Michigan, Illinois, and Florida.
Before the recession, Nevada had 64% more construction jobs per capita than the nation. Now it has 8% fewer jobs per capita — that’s a change in location quotient from 1.62 to .92 in six years.
But a few states here, most notably Minnesota (6% growth), Indiana (5% growth), and Tennessee (4% growth), are on the upswing since 2010.
State2001 Jobs2012 Jobs2001-12 Job Change2001-06 % Change2007-09 % Change2010-12 % ChangeMississippi71,91468,469-3,44516%-10%-6%Rhode Island26,03122,075-3,95624%-20%-7%Maine45,71041,627-4,08314%-14%-4%Utah83,01877,912-5,10632%-28%-1%Delaware28,92622,102-6,82422%-25%-7%New Mexico60,49452,994-7,50023%-17%-6%Kansas80,63673,063-7,5734%-8%0%Idaho49,47241,353-8,11938%-30%-5%Tennessee177,071168,080-8,99113%-17%4%Connecticut91,46181,511-9,9509%-15%0%Arkansas76,95966,418-10,54111%-6%-10%Maryland193,148178,446-14,70215%-16%1%Washington195,014178,998-16,01623%-21%0%Oregon111,04193,032-18,00920%-25%0%Indiana185,447163,849-21,5985%-16%5%New York424,244399,141-25,1035%-6%-3%Alabama137,005111,424-25,58110%-16%-9%Massachusetts187,675160,028-27,6475%-14%0%Kentucky121,35793,359-27,9981%-13%-5%Wisconsin158,654129,759-28,8957%-16%-3%Minnesota158,938129,489-29,4497%-19%6%Pennsylvania329,358296,541-32,8178%-11%-3%South Carolina144,683110,418-34,26514%-24%-3%Virginia260,981226,324-34,65718%-17%-4%Missouri179,972144,062-35,9109%-15%-4%New Jersey199,093163,083-36,01012%-16%-6%Nevada101,87958,043-43,83655%-37%-18%Colorado208,950158,707-50,2433%-18%1%Arizona204,399150,773-53,62639%-37%3%North Carolina295,859235,024-60,83512%-21%-5%Ohio314,231253,326-60,9050%-15%3%Georgia273,653212,624-61,02911%-20%-5%Florida515,475437,147-78,32854%-30%-4%Illinois335,207249,502-85,7054%-17%-5%Michigan265,170175,021-90,149-7%-19%-2%California1,001,555850,866-150,68922%-24%4%Source: QCEW Employees, Non-QCEW Employees & Self-Employed - EMSI 2013.1 Class of Worker
Sub-Industry Perspective
Which segments of construction are recovering the fastest? Here’s a 2010-2012 breakdown showings jobs added and lost by 4-digit NAICS industries. Utility system construction has grown 10% since 2010 (nearly 42,000 jobs added), followed by building equipment contractors (30,892 jobs added, 2% growth). However, building finishing contractors and residential building construction continue to bleed jobs.
Looking Forward
From 2012-2013, EMSI projects only six states will have greater than a 1% drop in construction employment, with the biggest decline projected in Michigan (-3%). And overall, the construction industry is projected to hold steady — no major growth and no major decline. That might not sound great, but it’s a whole lot better than where the sector was a few years ago.
Data for this post comes from Analyst, EMSI’s web-based labor market data and analysis tool. For more information, contact Josh Wright (jwright@economicmodeling.com). Follow us on Twitter @DesktopEcon