By Eric Jay Toll for Arizona Builder’s Exchange
Over the past months, AZBEX has reported on a growing shortage of construction workers, particularly in the specialty trades. The raw month-to-month numbers say otherwise. Construction led the job-shedding with a drop of 1,900 jobs for the month—the fifth time in 10 years the sector cut hiring during August.
Reasons might include winding down on the Intel Fab 42 project, completion of the school projects from the summer, and a lack of new projects breaking ground right away. Many homebuilders and some multifamily developers—while sitting on entitlements—are waiting for market demand to consume more inventory before starting.
Across the hiring market, the unemployment rate ticked up to 8.3 percent from 8.0 percent in July. Arizona’s rising adjusted unemployment rate was a full point higher than the national rate for the month. The 8.3 percent mark is the same as it was in August last year.
Year-Over-Year Construction Gains Continue
Year-over-year job gains in construction are strong, up 4.7 percent over 2012 with 5,600 more jobs in the sector. The vast majority of the slots were in the specialty trades, 5,000 jobs. Heavy construction gained 800 year-over-year, and building construction lost 200. The demand in the trades reflects concern about the lack of skilled workers expressed by the Arizona Builders’ Alliance and area builders. (AZBEX, September 10)
Phoenix Business Journal reported in premium content September 20 that builders and related businesses are hiring, but doing so slowly because of economic uncertainties. Much of the construction hiring is related to homebuilding, but the demand for skilled workers is higher than the available labor supply. The industry-related hiring is moving into mortgage lenders on one side of the scale—although Wells Fargo, Chase and Bank of America recently announced mortgage lending staff reductions for the Fall—but the Journal says other lenders are hiring.
Unemployment Up Across the State
In the state’s metropolitan areas, Flagstaff’s 6.0 percent unemployment rate is the lowest. Phoenix’ unemployment rate, 7.4 percent for August is second. While Flagstaff was unchanged, the Phoenix metro’s rate is up 0.4 percent from July. Tucson and Prescott rank third at 7.7 percent, but Tucson’s rate climbed 0.5 percent from July; Prescott was only up 0.3 percent. Yuma’s state-topping 30.7 percent unemployment rate actually declined from its 33.2 percent mark in July.
In Phoenix, there were 97.2K construction-related jobs, down from 98.5K in July, but higher than 2012’s 91.0K in August. In Tucson, construction employment was flat with 14.8K jobs last month, down 100 from July, and up 200 from 2012’s 14.6K in August. In Flagstaff, Lake Havasu City-Kingman, Prescott and Yuma, construction jobs are part of the “natural resources and construction” sector, in which hiring was flat between August and July.
Read more AZBEX Labor Shortage Coverage:
September 6: AGC Bemoans Nationwide Labor Shortage