US construction unemployment still below pre-pandemic levels

US construction employment in November remained below pre-pandemic levels in 35 states and the District of Columbia even though 31 states and D.C. added construction jobs from October to November, according to an analysis by the Associated General Contractors of America of government employment data.

“An increase in project cancellations and postponements is forcing nonresidential contractors to lay off workers as they complete projects started before the pandemic and firms exhaust their Paycheck Protection Program loans,” said Ken Simonson, the association’s chief economist, noting that overall industry employment would likely shrink in more states in the absence of federal assitance.

Regarding government aid, Congressional negotiators agreed on a new US$900-billion Covid relief package on 20 December, which includes an additional US$284 billion for the Paycheck Protection Program (PPP) for small businesses, created under the original Coronavirus Aid, Relief, and Economic Security Act (or CARES Act) in March.

The bill also addresses the hotly contested deductibility of expenses paid for with the forgivable loan. It’s been the Trump Administration’s position to date that businesses could not deduct the expenses paid for with PPP funds as they ordinarily would because the loan is forgivable and not taxable income. The Administration’s view was that tax deductions would be “double dipping” on top of the grant, however, the business community voiced concern over this adverse tax consequence, which is now corrected under the new relief package.

“While the pandemic is causing more and more construction to be canceled or postponed, it is imperative that Congress renew the loan program that will keep contractors from shutting their doors and workers from losing their jobs,” said Stephen E. Sandherr, the association’s chief executive officer in a recent statement. “In addition, it is vital that Congress stop the Treasury from playing ‘gotcha’ with firms that rightly expected their loans to be treated as nontaxable.”

Seasonally adjusted construction employment in November was lower than in February - the last month before the pandemic forced many contractors to suspend work - in 37 states, Simonson noted.

New York lost the most construction jobs over the nine-month period (-39,700 jobs or -9.7%), followed by Texas (-37,200 jobs, -4.7%). Vermont experienced the largest percentage loss (-24.5%, -3,600 jobs), followed by North Dakota (-13.9%, -4,100 jobs).

Only 15 states and the District of Columbia added construction jobs from February to November. Virginia added the most jobs and highest percentage (11,800 jobs, 5.8%), followed by Utah (5,800 jobs, 5.1%).

Construction employment decreased from October to November in 17 states, increased in 31 states and D.C., and was unchanged in Maine and Nebraska. California had the largest loss of construction jobs from October to November (-5,800 jobs or -0.7%), followed by New Jersey (-3,800 jobs, -2.5%) and Nevada (-3,700 jobs, -3.9%). Nevada had the largest percentage decline, followed by South Dakota (-3.8%, -1,000 jobs).

Texas added the most construction jobs over the month (7,500 jobs, 1.0%), followed by Pennsylvania (4,300 jobs, 1.7%). Delaware had the largest percentage gain for the month (3.8%, 800 jobs), followed by Utah (2.6%, 3,000 jobs).

View state employment February-November data and rankings; and October-November rankings.