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Unemployment Rate Holds Steady, Construction Loses Small # of Jobs

By Eric Jay Toll for Arizona Builder’s Exchange

If there is one fact economists are learning about post-recession recovery 2013, it’s that nothing is following the rules. No one has seen external forces like these hammering on economic growth. In April, although the unemployment rate in Arizona stayed level at 7.9 percent, the April-over-March job growth dipped below the post-recession average. According to AzStats, the Arizona Department of Administration April Workforce Employment Report, the number of new jobs created, 5,200, was about two-thirds of the two-year post-recession average monthly gain, 7,500.

Construction Employment

Graphs Source: Prepared by the Arizona Office of Employment and Population Statistics, in cooperation with the U.S. Dept. of Labor, Bureau of Labor Statistics

Construction, one of the drivers behind Arizona’s job growth during the past two years, actually lost jobs in April. Historically, the sector picks up jobs in April, but for 2013, even though specialty (700 jobs) and heavy (100 jobs) gained 800 workers, building construction dumped 900 jobs. On top of those numbers, the job gains were lower and the losses higher than the ten year April average from 2003-2012.

Normally ranking in the top three in job growth, the construction job loss is a statistical surprise, but not unexpected. A fair number of projects were completed during the first quarter, and those deliveries send construction crews searching for new work. There are a fair number of new projects—particularly multifamily and industrial—meandering through municipal approval processes. TIs and deferred renovations are also showing signs of life.

Job Gain2013-over-2012 Construction Jobs Grow

Despite the one month pothole in job stats, construction is responsible for more than 15 percent of year-over-year job growth. Of the 7,300 more construction jobs gained since April 2012, over 70 percent were in the specialty trades, nearly 21 percent are in heavy construction jobs and fewer than 10 percent were in building construction.

No economists were surprised with leisure and hospitality topping the year-over-year job growth numbers with 9,800 new jobs created. Construction’s 7,300 were the number two job generator, just edging out professional and business service sectors with its 7,100 new jobs. Only the other services job sector lost jobs (900) over the last twelve months.

With the state’s unemployment rate in April still hanging at 7.9 percent, the various metros are showing mixed improvements. Phoenix, 6.6 percent, and Tucson, 6.7 percent, both showed one-tenth of a percent declines in April from March. Tucson was the same in April 2012 and 2013; Phoenix dropped two-tenths of a percent in the year-over-year rates. Phoenix and Tucson added 8,000 construction jobs in the 12 months ending April 2013—meaning that 700 jobs were lost elsewhere across the state.

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