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Minnesota construction employment falls in snowy April

William Morris//May 17, 2018//

A bulldozer operator heads home after a day of work May 3 at the Allianz Field soccer stadium construction site in St. Paul. State officials say a cold and snowy start to spring has contributed to the worst 12-month decline in construction employment since 2010. (File photo: Bill Klotz)

A bulldozer operator heads home after a day of work May 3 at the Allianz Field soccer stadium construction site in St. Paul. State officials say a cold and snowy start to spring has contributed to the worst 12-month decline in construction employment since 2010. (File photo: Bill Klotz)

Minnesota construction employment falls in snowy April

William Morris//May 17, 2018//

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Minnesota’s construction industry in April saw its steepest year-over-year employment decline since 2010, even as the nation’s industry continues to grow.

Seasonally adjusted figures released Thursday put construction down 1,627 jobs for the past 12 months, a 1.4 percent decline in a period that U.S. construction employment grew 4.4 percent.

The Minnesota Department of Employment and Economic Development reported 400 fewer construction workers were employed in April. The industry added almost 4,900 jobs in February but then began losing ground, with a 1,000-job drop in March.

Labor analysts think much of the decline is a temporary trend driven by a cold, snowy spring.

“We’ve had two very weak months, March and April,” said Steve Hine, director of DEED’s Labor Market Information Office, who noted the data for this month’s report were collected in mid-April. “The first half of April was a miserable time to be starting construction projects.”

To some extent, the unusual year-over-year decline also reflects a long run of success for the industry, he said.

“Construction for much of the last few years has been one of the strongest areas,” he said, noting recent years have seen monthly gains as high as 13,000 new construction jobs. “By and large, we had really, really strong growth in much of the recovery.”

It’s not just construction seeing a decline. Hiring in all industries has been slow, Hine said. Statewide, employers shed 3,200 jobs in April, although the unemployment rate held steady for the third month at 3.2 percent. DEED also revised March’s estimate down from 2,900 new jobs to just 400. The U.S. unemployment rate dropped to 3.9 percent from 4.1 percent in March.

Several weather-dependent industries were hurt by April’s heavy snows, including leisure and hospitality; trade, transportation and utilities; and of course construction.

But growth was sluggish for indoor professions as well, Hines said.

“Even sectors of the economy that don’t have the same sensitivity to rain falling or sun shining, we do see a slowing in our rate of growth, which does seem to stem from the difficulty employers are having bringing people on board,” he said.

Even as construction lagged, manufacturing was a bright spot in the report with 900 new jobs for the month and 4,715 for the year. Hines said that sector’s gain may be coming at construction’s expense.

“It’s certainly been expected for a long time now, but I think we’re really starting to see the impact of this worker shortage on the ability of these companies to expand when business calls for it,” he said. “I suspect construction might be particularly prone to that challenge, because we have an aging population and construction isn’t a trade older workers are necessarily going to turn to when they’re seeking employment.”

It’s not just the workers out in the elements that are hard to find. David Oxley, executive director at the American Council of Engineering Companies of Minnesota, said he hears constantly that finding workers is the top concern for his member companies.

“I talked to a member just two days ago who said they gave up trying to find people because they’re not there,” he said Thursday. “Practically every firm in town is looking for people and they just aren’t there.”

One thing that isn’t hurting construction employment is lack of demand. Oxley said engineering companies have more work than they can handle at current staffing levels.

“We’re kind of the canary in the coal mine,” he said. “If we’re busy, it probably bodes well for the contractors at the other end of the spectrum.”

Going forward, Hines said he expects some rebound next month after a warm and sunny early May. The underlying worker shortages, though, will remain.

“May’s numbers will tell us a great deal about the impact of a short-term weather-related slowdown vs. a long-term labor shortage,” he said.

According to DEED, the strongest sector for job growth in April was “other services” with 1,400 new jobs, followed by financial activities (1,200), manufacturing (900) and government (200). No change was reported in logging and mining, and the information sector.

Other sectors losing jobs in April were leisure and hospitality (down 3,600), trade, transportation and utilities (2,000), professional and business services (700), and education and health services (200).

The jobs picture
Minnesota year-over-year employment growth by industry sector as of April 2018

Number of jobs gained or lost % change from 2017
Total nonfarm 11,659 0.4
Total private 5,362 0.2
Logging & Mining -107 -1.7
Construction -1,627 -1.4
Manufacturing 4,715 1.5
Trade, Transportation & Utilities 1,254 0.2
Information -789 -1.6
Financial Activities 873 0.5
Professional & Business Services -1,352 -0.4
Education & Health Services 6,097 1.1
Leisure & Hospitality -3,314 -1.3
Other Services -388 -0.3
Government 6,297 1.5

Source: Minnesota Department of Employment and Economic Development

 
 
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