Construction Sheds Jobs Amid Manufacturing Recovery

Manufacturing has been the star of the recovery, powering Michigan out of the Great Recession. But the outlook remains dim for another chief pillar of the nation's economy: construction.

The industry that builds everything from homes and offices to roads, bridges and power plants is a major economic weak spot.

Just last month, the nation lost 28,000 construction jobs. In Michigan, industry employment shrank by 3,000 jobs from April 2011 to April 2012.

The glut of homes, offices and retail space combined with fewer government-financed projects means things are not likely to significantly improve anytime soon.

"We keep waiting for an increase in volume, but unfortunately we don't see it for the next 18 months to two years," said Ken Lawless, executive vice president of Clark Construction, a Lansing general contractor, and chairman of the Associated General Contractors of Michigan.

Barton Malow, one of the state's biggest construction companies, doesn't expect a full industry recovery until 2015, said Alex Ivanikiw, the firm's senior vice president.

The grim outlook persists even as many subcontractors and other construction-related companies have quietly shut down their businesses because of too little work in recent years, with more failures expected. Even more worrisome for construction's long-term future, thousands of skilled workers have left the troubled industry.

Construction is a major economic driver, normally accounting for 4% to 5% of the nation's economic output, according to Kenneth Simonson, chief economist of the Associated General Contractors of America. Today, this percentage has dropped to 3%, a historic low.

In Michigan, some companies that have stuck it out through the tough times are seeing a slight increase in activity this year, but bids are so low that profit margins have never been tighter. And hundreds of carpenters, laborers, sheet metal workers and others are desperate for work.

"I've never felt so depressed," said Vincent DeMassa of Redford, a 36-year-old carpenter who used to work on commercial construction projects like hospitals but can now find only occasional repair jobs for homeowners.

Go here to see the original:
Construction Sheds Jobs Amid Manufacturing Recovery