Construction employment may have been down slightly in February, but it is part of a larger trend in the jobs market that points to a slow, but sustainable growth for the U.S. economy through 2012 and beyond.
For February, construction jobs were down 13,000, according to the latest employment reports, but since January 2011, when construction employment bottomed, the sector has added 98 thousand jobs. In fact, according to analysis on Calculated Risk, 2011 was the first year since 2006 that construction employment was positive, and the first since 2005 with an increase in residential construction employment.
Best demonstrated in a Calculated Risk graph, though overall construction employment is down about 28 percent, it is trending positively and, as Bill McBride wrote for the site, “[c]onstruction employment is generally increasing and construction will add to both GDP and employment growth in 2012.”
The behavior of residential construction in the current economic climate has differed from past recessions. As McBride noted, residential investment and construction normally lead the economy out of a recession, but because of the large excess supply of vacant homes (both newly-constructed and foreclosed existing properties), that was not the case with the economic downturn beginning in 2007.
Even so, as we have reported before, housing starts and residential construction make up one of housing’s bottoms, and considering those areas did bottom in 2011, things will be looking up in 2012 and especially 2013.
Also, on the greater employment front, February also revealed a promising trend for the durations of joblessness. Of the four categories of unemployment – less than 5 weeks before finding work, 6 to 14 weeks, 15 to 26 weeks and 27 weeks or more – all the areas moved down, and the “less than 5 weeks” category is even back to pre-recession levels.
Long-term unemployment, of 27 weeks or more, is still unnaturally high, but like construction data, it is undoubtedly improving – it’s at its lowest level since August 2009.