Minnesota construction companies shed 200 jobs in August, a modest loss but enough to drag the sector’s year-over-year job numbers into negative territory.
Between August 2014 and last month, the industry lost 525 positions, according to data released Thursday by the Minnesota Department of Employment and Economic Development. That shakes out to a 0.4 percent decline, falling well short of the sector’s 3.4 percent national growth rate.
The latest losses come after the state lost 2,000 construction jobs in July – an indication that the market is returning to normal after a robust post-recession rebound. The figures are seasonally adjusted to weigh each month’s performance against that month’s showing in recent years.
Overall, the state added 7,300 jobs in August, locking year-over-year growth at 1.3 percent, short of the 2.1 percent U.S. average. Meanwhile, the unemployment rate held at 4 percent in August, clocking in below the 5.1 percent national rate.
Still, it has been a relatively sluggish 2015 for Minnesota’s construction players as stimulus funding and a handful of big projects wind down. Only three months so far this year yielded seasonally adjusted job gains, though the additions have been fairly substantial.
In August, the specialty trades segment was a drag on the broader construction numbers, said Steve Hine, research director of DEED’s Labor Market Information Office.
That subgroup shed 845 jobs on an unadjusted basis in August – an unprecedented loss, Hine said, that hit during the thick of Minnesota’s construction season. Over the past year, specialty trades contractors lost a total of 1,200 jobs, he said.
The specialty trades include plumbers, electricians and others. They’ve battled for months against a shortage of skilled workers, said Mike Schmaltz, executive director of the Minnesota Subcontractors Association.
It’s keeping subcontractors from taking on projects, pitting growth prospects against the reality that contractors’ capacities might not measure up.
“Everybody is really busy right now and it’s creating problems at a number of different levels in terms of getting people on board,” Schmaltz said. “It slows down bidding and the whole process.”
Conditions won’t likely change through the fall months, he said.
Prospects for other construction segments are bit brighter, but a slim pipeline of new workers poses problems for the sector as a whole. Groups from various corners of the construction marketplace met in recent months to brainstorm potential ways to plug widening gaps in recruitment and training.
“Could we have had more growth in the construction industry if we didn’t have such extremely low labor availability? That’s always the question, and I think we could’ve done a lot better if we weren’t plagued by this labor shortage,” said Robert Heise, president of the Associated Builders and Contractors of Minnesota and North Dakota.
Construction companies aren’t the only ones trying to capture growth despite difficult market conditions. Manufacturers logged more job losses in August, a lingering effect of the avian flu outbreak that earlier this year sidelined poultry producers across the state.
The loss of 2,200 jobs in the nondurables space, concentrated among food manufacturers, more than offset the addition of 1,200 jobs by durable-goods producers and compounds a steady stream of losses over the past several months.
“Much like with specialty trades and construction, we just saw weakness in that one area that was enough to bring down the sector by 1,000 jobs,” he said, noting some areas – fabricated metal products and medical equipment, for example – remain healthy.
The biggest sector gains in August came from professional and business services and leisure and hospitality, with 4,600 new jobs apiece.
Education and health services, a perennial gainer, posted another 2,900 positions in August, while financial activities added 1,600. Logging and mining added 200 spots, matching gains in information.
On the other side, August hit the government sector hard, reducing its job count by 5,000. Other services lost 400 positions, while trade, transportation and utilities dropped 200.
The Jobs Picture
Minnesota year-over-year employment growth by industry sector as of August 2015
Number of Jobs Gained or Lost
% Change from 2014
Total Non-Farm Employment
Logging and Mining
Trade, Trans. and Utilities
Prof. and Bus. Services
Ed. and Health Services
Leisure and Hospitality
Source: Minnesota Department of Employment and Economic Development
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