Construction Employment Drops in 146 Out of 337 Metro Areas Between November 2010 and 2011

Construction employment declined in 146 out of 337 metropolitan areas between November 2010 and November 2011, increased in 131 and stayed level in 60, according to a new analysis of federal employment data released December 28 by the Associated General Contractors (AGC) of America in Arlington, Va. Association officials noted that construction employment is likely to continue declining in many areas because of a planned 6.2 percent cut in federal investments in construction and infrastructure for the 2012 fiscal year.

"There is no avoiding the pain that comes any time the single largest purchaser of construction services cuts investments by nearly 20 percent in two years," says Ken Simonson, AGC's chief economist, in the release. He notes that the fiscal year 2012 federal construction budget will be 18 percent smaller than the same budget for 2010. "It will take a lot more private sector growth to offset declining federal demand," he says in the release.

AGC officials said that the federal construction cuts, which were included in the recently passed Omnibus Appropriations Bill, will cost taxpayers more in the long run than whatever short-term savings are being realized, according to the release. They noted, for example, that significant cuts for new federal building projects will force taxpayers to pay more for the delayed structures. They said that federal officials estimate the budget cuts for this year will force taxpayers to spend $500 million more for the new headquarters for the U.S. Department of Homeland Security than originally estimated.

"This is an awfully expensive way to save a few dollars in the short term," says Stephen E. Sandherr, AGC's CEO, in the release. "These cosmetic cuts won't help taxpayers, but they will cost construction workers their jobs and complicate long-term efforts to cut the deficit."