Construction industry gets jobs boost, but challenges loom

Minnesota construction companies added 1,900 jobs in January — enough to finally recoup thousands of positions shed during the thick of the recession, according to state data released Thursday.
The gains put construction among the few bright spots in Minnesota’s January jobs picture. Across all sectors, the state shed 5,000 jobs during the month, seasonally adjusted data from the Minnesota Department of Employment and Economic Development show.
Construction companies shed 24,900 jobs between February 2008 and January 2009, the span of the financial crisis that brought the most trouble to Minnesota employers. But by January, construction outfits had increased their worker tallies by 26,700.
The industry still hasn’t hit pre-recession employment levels — it started shedding jobs about two years before the financial crisis hit hardest. Still, progress made since then hints at stability in a sector heavily influenced by broader macroeconomic factors.
A strong specialty trades segment, including pipefitters and electricians, provided the biggest boost to overall construction numbers for January, piling onto revisions unveiled Thursday that padded job tallies from last year.
The healthy housing market began to buoy the specialty trades toward the end of last year after a lackluster stretch over the summer. Minnesota’s construction sector expanded its workforce by 5 percent year over year based on January’s totals, outpacing the 4.5 percent national growth rate.
An early start to spring will likely fuel further workforce expansion in the coming months, said Steve Hine, research director for DEED’s Labor Market Information Office.
“I think there’s good, positive signs for continued strength there,” he said.
In addition, revisions to last year’s data showed marked gains in the heavy and civil construction space — a segment that had previously appeared to lag behind others. But those workers do risk falling without a transportation funding package to jump-start road and bridge projects around the state.
Just days into the 2016 legislative session, a comprehensive transportation bill is one of the most hotly debated items on the menu. Though there’s broad consensus that the state needs to cobble together a funding plan, lawmakers are at odds over exactly how to do it.
Several construction industry trade groups have elbowed their way into talks, advocating for increased funding for road, bridge and transit projects.
Dave Semerad, who heads the Associated General Contractors of Minnesota, previously told Finance & Commerce his group would be “right in the middle” of transportation talks, with an eye toward a hefty bonding bill and improvements to aging water an utility infrastructure.
But the state’s top lawmakers this week showed they still have a long way to go after earlier stabs at a transportation funding plan flamed out last year.
At a reception hosted by the Minnesota Chamber of Commerce — a prominent business advocacy group pushing for transportation investment this session — the DFL and Republican leadership spotlighted sharp divides in their competing funding frameworks.
While the Legislature’s action during its 10-week session will help steer the construction industry’s near-term future, its long-range outlook remains murky.
Minnesota’s labor force is growing at a rate of 1.4 percent, according to DEED’s January figures, slower than initially thought. At the same time, the unemployment rate — relatively unchanged for months — landed at 3.7 percent.
If it keeps up long enough, sluggish labor force growth will eventually hold back job growth.
“Construction is going to have a particularly challenging time in that respect, given the nature of the work and fact that what labor force growth we are likely to see in the future is largely going to come in the form of older workers,” Hine said. “Construction, as I say, is not an industry for old men.”
Other industries that registered January job gains include education and health services (up 3,000), and leisure and hospitality (up 900).
Job losses struck trade, transportation and utilities (down 2,100), information (down 1,800), professional and business services (down 1,600), manufacturing (down 900), financial activities (down 200), and logging and mining (down 100). The catch-all other services category shed 300 jobs. 
The Jobs Picture
Minnesota year-over-year employment growth by industry sector as of January 2016

Number of Jobs Gained or Lost
 % change from 2014

Total Non-Farm Employment

Logging and Mining



Trade, Trans. and Utilities


Financial Activities

Prof. and Bus. Services

Ed. and Health Services

Leisure and Hospitality

Other Services


Source: Minnesota Department of Employment and Economic Development

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