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AGC Says Overall Construction Employment Up, Civil Employment Down

December 17, 2014
 / Operations / 

Construction_concrete_pipeEmployment in the construction industry is at a five-year high, according to a recent article by Associated General Contractors of America (AGC).

The sector added 20,000 jobs, bringing the industry’s unemployment rate to seven-year low of 7.5 percent. That’s the lowest November rate since 2007, just before the “Great Recession” hit.

The AGC study, however, did show a few signs that public construction could be slowing. Heavy civil construction jobs—which include public works—were down 1,300 in November. Nonresidential building construction was also down 2,400 jobs.

AGC Chief Executive Officer Stephen E. Sandherr said the slowdown is indicative of recent government fiscal actions—or inactions, in this case. And HCSS Chief Operating Officer Steve McGough agrees.

“If you look at our biggest challenge in this industry, we don’t have a long-term transportation bill,” McGough said. “We kick the can down the road. You want a six-year bill so that states know how to fund projects and know what to expect.”

Instead of the six-year bill, however, Congress has passed nine short-term extensions in recent years. The latest extension, worth $10.8 billion, is set to expire in May, just as construction’s busy season resumes.agc

States typically will start delaying scheduled work starting in February and March, McGough said, because they are unsure of how much of their infrastructure budget the U.S. Government will match.

“[The government] doesn’t have the money,” he said. “The problem is getting the funding and a new source of revenue for the highway trust fund. It comes from taxes.”

Gas taxes typically fund highway improvements, but a combination of increased inflation, more fuel-efficient cars, and a lack of tax increases has slowed the revenue stream.

The most recent gas tax increase was in 1993, from 14.1 cents per gallon to 18.4 cents per gallon.

“People think that when gas goes up to $4 per gallon that the funding for highways and roads goes up as well, but it doesn’t,” McGough said. “It’s a straight, flat fee. And you’ve got more fuel-efficient cars on the road, so the trust fund is basically insolvent. Every six months or a year, you’ve got to figure out a way to make up $6 billion or $7 billion dollars just to fund it until the next year.”

The heavy and civil construction sector could begin to feel the effects of cancelled work. As projects become scare, margins will become tighter due to more bidders per project.

HCSS HeavyBid can help companies ensure their bids are done quickly, efficiently, and accurately. The most trusted estimating software in construction allows you to import items from your owners, build your estimates automatically, and compare to historical estimating data.

And once you win the job, HCSS HeavyJob can help ensure you complete the project on time and on budget, with real-time cost and production rate analysis, automatic integration with accounting, and reduced errors.

Read the entire AGC article here.

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