Construction employment plummets in Valley - East Valley Tribune: News

Construction employment plummets in Valley

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Posted: Monday, January 4, 2010 2:21 pm | Updated: 3:34 am, Sat Oct 8, 2011.

Arizona communities are losing construction jobs at levels that exceed much of the rest of the country, according to a new study.

The report produced Monday by Associated General Contractors shows the one-year decline for the Valley at 23 percent in the 12 months ending last November. That is pretty much the worst of any major community in the nation.

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That isn't to say that things are better elsewhere in Arizona.

The Tucson area posted a 20 percent year-over-year drop in the number of people employed in construction.

In smaller communities, where job statistics for construction are lumped in with timber and mining, there were similar reports.

Coconino County fared little better than the Phoenix area with a 22 percent drop. Yavapai County lost 20 percent of its jobs in that sector of the economy, with an 18 percent decline in Mohave County and a 15 percent drop in Yuma County.

And Mark Minter, executive director of the Arizona Builders' Alliance, one of the local AGC chapters, said it doesn't look like the situation is going to turn around any time soon.

He said construction jobs in Arizona tend to lag behind the overall economy by about a year. And with economists predicting the state won't really hit bottom until the second or third quarter of this year, Minter said he's not holding out for an increase in construction employment until 2011 - if not later.

The community-by-community figures track statewide numbers released last month by the Arizona Department of Commerce. It pegged statewide construction employment for November at 131,800 jobs, a drop of 22 percent.

Overall, AGC said construction employment declined during the 12-month period in 324 out of 337 metropolitan areas. The organization pegged that to a $137 billion drop in construction projects, to a six-year low of $900 billion.

Martin said the reason the Arizona figures are so bad is what he called a "double-whammy" hit on the economy.

First, he said, is that Arizona is one of the areas in the country particularly hard hit when the housing bubble burst. California, Florida and Nevada also were hard hit.

But what makes the situation in Arizona so bad, Minter said, is the sharp decline in state and local tax dollars which, in turn, dried up construction projects.

That isn't the case everywhere.

"For example, Las Vegas is one of the areas where you had a housing bubble pop," Minter said. "But they still had gambling income which sort of propped up state and local governments' budgets so you didn't have to have as draconian cuts at the level we've had here by the state."

Minter said the results are clearly visible. State supported school construction which used to generate more than $300 million a year is now less than $100 million. And cities, strapped by the same budget crunches, also are delaying and cancelling projects.

Minter said the federal stimulus funds have provided some help - but mainly for the sectors of the industry involved in building roads and bridges.

Overall construction employment in Arizona is down to close to half of what it was at its peak in 2006.

Minter said the sharp decline has resulted in a shake-out in the industry, with some companies going out of business and others which had expanded here from elsewhere deciding to shutter their Arizona operations.

One bright sign in all that, he said, is that it may help the companies that remain.

Minter said some firms are so desperate for work that they are now bidding contracts at below their costs. Fewer competitors, he said, may make that less necessary.

And Minter said that, despite the economy, there still is new construction going on in Arizona, from strip malls to housing.

The worst year-over-year drop was in the El Centro, Calif., area which posted a 36 percent decline. And of the six areas in the country that actually gained jobs, only two showed an increase of at least 100: Harrisburg, Pa., and Tulsa, Okla.

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