AGC: Project cancellations, postponements weighing on contractors

Thirty-four percent of the nation’s metro areas added construction jobs from November 2019 to November 2020, according to an analysis of new government data that the Associated General Contractors of America (AGC) released.

AGC officials say large numbers of contractors are having to lay off workers once they complete projects begun before the pandemic because private owners and public agencies are hesitant to commit to new construction.

“Canceled and postponed projects appear to be more common than new starts for far too many contractors,” says Ken Simonson, the association’s chief economist. “Our association’s 2021 Construction Hiring & Business Outlook Survey found three times more contractors have experienced postponements and cancellations than new or expanded projects.”

Employment breakdown

Construction employment fell in 203, or 57 percent, of 358 metro areas between November 2019 and November 2020, AGC adds. Construction employment was stagnant in 33 additional metro areas, while only 122 metro areas – 34 percent – added construction jobs during the past year.

The region of Houston-The Woodlands-Sugar Land, Texas, lost the most construction jobs over that span (22,500 jobs, 9 percent), AGC adds, followed by New York City (16,700 jobs, 11 percent); Midland, Texas (9,800 jobs, 25 percent); the region of Montgomery-Bucks-Chester counties, Pennsylvania (8,800 jobs, 16 percent); and the region of Oakland-Hayward-Berkeley, California (8,400 jobs, 11 percent).

The region of Brockton-Bridgewater-Easton, Massachusetts. had the largest percentage decline (40 percent, 2,200 jobs), followed by Altoona, Pennsylvania (35 percent, 1,100 jobs); the region of Bloomsburg-Berwick, Pennsylvania (31 percent, 400 jobs); Johnstown, Pennsylvania (31 percent, 800 jobs); and East Stroudsburg, Pennsylvania (30 percent, 600 jobs).

The region of Phoenix-Mesa-Scottsdale, Arizona, added the most construction jobs over 2020 (4,700 jobs, 3 percent), followed by the region of Baltimore-Columbia-Towson, Maryland (4,500 jobs, 5 percent); Boise, Idaho (4,300 jobs, 16 percent); the region of Dallas-Plano-Irving, Texas (3,700 jobs, 2 percent); and the region of Seattle-Bellevue-Everett, Washington (3,600 jobs, 3 percent). Walla Walla, Washington, had the highest percentage increase (17 percent, 200 jobs), followed by Boise; Oshkosh-Neenah, Wisconsin (16 percent, 900 jobs); and Springfield, Missouri (16 percent, 1,500 jobs).

AGC officials say many metro areas were likely to lose more construction jobs amid declining demand and continued project cancellations and delays.

“Construction employment is likely to fall further in many parts of the country as the coronavirus continues to weigh on demand for nonresidential projects,” says Stephen Sandherr, AGC’s CEO. “Unless market conditions change rapidly, this year is likely to prove very challenging for many construction employers.”