"As June was a setback for nonresidential construction, the stimulus package is set to have its greatest impact in the quarter ahead, and an emphasis on transportation and infrastructure projects should prove favorable to the construction industry." —ABC Chief Economist Anirban Basu

Job losses in the nonresidential construction sector surged in June to 11,700, according to the July 2 employment report by the U.S. Labor Department. On a year-over-year basis, nonresidential building construction employment fell by 88,700, or 10.8 percent, to 734,600.

Residential building construction shed 6,800 jobs for the month and 136,400 from June 2008 as employment in this sector now stands at 700,900. Job losses for total private construction, which includes specialty trade contractors, were 79,000 from May to June, and 992,000 over the past twelve months.

Overall, national employment decreased by 467,000 from the previous month and 5,664,000 from June 2008. Since the start of the recession in December 2007, employment has declined by 6,460,000, or 4.7 percent. The nation’s unemployment rate now stands at 9.5 percent – a 26-year high.

What This Means
“Today’s employment report is a setback for the nation’s economic recovery as job losses far exceeded consensus predictions,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “As the overall unemployment rate rose just 0.1 percent, one must consider there was a drop in labor force participation from 65.9 percent in May to 65.7 percent in June showing the impact of poor employment opportunities and a likely rise in discouraged workers.

"There is a bright spot, however. The pace of monthly job losses in the second quarter slowed to 436,000 compared to 691,000 in the first quarter of 2009,” said Basu.

“After exceeding expectations in previous months, this also represents a setback for nonresidential construction as job losses exceeded 10,000 in June after losing just 100 jobs in May,” added Basu.

“As June was a setback for nonresidential construction, the stimulus package is set to have its greatest impact in the quarter ahead, and an emphasis on transportation and infrastructure projects should prove favorable to the construction industry,” said Basu.