Construction Jobs May Decline by 250,000

U.S. construction jobs may decline by as many as 250,000 by the end of next year, but construction employment may have already fallen by 160,000 jobs below what's being reported in current payroll data, according to a report on Forbes.com.

Using Labor Department figures and previously unpublished data from the private-sector ADP National Employment Report, analysts at Macroeconomic Advisers predict an average 14,000 jobs lost per month over the next year and a half, the article said.

The economists said in the study that such a decline would be smaller than many commentators suggest is likely.

Macroeconomic Advisers prepares the monthly ADP National Employment Report based on ADP's national payroll processing data. The study examines why construction employment doesn't seem to have fallen as fast as the housing collapse would indicate. Forbes reports that from January of 2006 through May of this year, single-family housing starts fell 36 percent while construction employment fell only 0.6 percent. Economists' explanations for the discrepancy include undercounting, slow adjustment by companies, lay-offs of undocumented workers who don't file for unemployment and bias in the Labor Department's estimating procedures.

The new study suggests that employment in large- and medium-sized construction companies is down while smaller companies have not had major layoffs. It also suggests a shift to different kinds of construction. The economists predict the drop in construction employment should be “essentially done” by next spring, according to the Forbes.com article.