Construction outfits in Minnesota added 2,600 jobs in June, continuing a solid run during the summer months that has offset a slight lag earlier in the year.
The additions extend growth in the sector going back to April, according to seasonally adjusted data released Thursday by Minnesota’s Department of Employment and Economic Development. June’s gains pushed total construction jobs to about 110,000 – the most since July 2008.
A long-awaited uptick in nonresidential construction drove last month’s expansion, said Steve Hine, research director of DEED’s Labor Market Information Office.
“That was, for a long time, sort of the one weak spot within construction,” he said. “It was the other components – the residential construction, heavy and civil construction and specialty trades – that were really driving the strength in construction.”
Construction jobs tied to residential and nonresidential buildings swelled by 11.2 percent on an unadjusted basis in June, he said. While nonresidential construction buoyed that figure, homebuilders picked up steam after six consecutive months of year-over-year declines, according to the data.
The specialty trades subsector – a strong performer in recent months – provided a boost with 7.4 percent job growth in June.
Growth would be stronger still if the industry wasn’t grappling with a worker shortage that’s dragged it down for years, said Robert Heise, president of the Associated Builders and Contractors of Minnesota and North Dakota.
“It’s painful because we have some good contractors here,” he said. “They have to turn down work and that hurts. When you have that kind of backlog and you don’t have enough personnel to put that work in place, it hurts.”
Labor market strain has made it more expensive for construction companies to lure workers. Construction wages in Minnesota shot up 5.4 percent in June, according to DEED.
For the industry, that increase cuts both ways, said David Siegel, executive director at the Builders Association of the Twin Cities.
“When you have a shortage of anything, that means prices go up. The cost of acquiring labor is going to go up,” he said. “It’s good news in the sense that people are going to make more money. It’s bad news in the sense that it puts pressure on pricing, and consumers are very wary of rising prices.”
Construction was one of four corners of the marketplace to add jobs in June, outpaced only by the 3,200 positions added by education and health services companies. Professional and business services gained 200 jobs while financial activities folded in another 100.
Meanwhile, a half-dozen sectors posted job losses in June, led by manufacturing, which shed 800 positions. The avian flu that swept across Minnesota poultry farms continues to take its toll on the sector, with food manufacturers on a disappointing run in what is typically their strongest time of the year.
On unadjusted terms, manufacturing jobs grew by 1.4 percent – the smallest-ever gain for a June, Hine said. A modest job increase among durable manufacturers in June was not enough to offset the weakness dogging nondurable goods makers, including food manufacturers.
The lag in June comes after a nearly unprecedented decline in May.
“June is usually a month where we start to see gains and we just aren’t seeing them there,” he said.
Losses elsewhere include 600 jobs cut from the trade, transportation and utilities space, matching losses in government. Information jobs decreased by 500, while the leisure and hospitality space dropped 400 and other services lost 300.
Logging and mining held steady.
The state added 2,900 jobs in June, bringing its year-over-year total to 41,062, up 1.5 percent. U.S. job growth for the same stretch was 2.1 percent.
Minnesota’s unemployment rate inched up to 3.9 percent compared with 3.8 percent in May. It still falls well short of the 5.3 percent national average for June.
The Jobs Picture
Minnesota year-over-year employment growth by industry sector as of June 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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