Construction takes it on the chin

We’ve written so much about the depth of this recession and the struggles of Minnesotans trying to make it through the hard times, it’s hard for us to be stunned by data.

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But then we look at the state of Minnesota’s construction employment and we’re stunned.

For as bad as it’s been, the state’s monthly unemployment data has brought bits of encouraging news to the state’s job markets at some point during the year. But not in construction.

We saw that again Thursday when state unemployment data for December showed construction jobs down 4,700 for 2010, a year over year percentage decline (down 5.7 percent) far worse than any Minnesota sector and much worse than the U.S. construction business (down 2 percent).

Given the recession and the collapse of the housing business, it’s no shock that the construction trades are suffering, especially residential construction.

But step back and look at the stats from the 1990s to the go-go days just five years ago to where we are now and it’s extraordinary: Five years. Nearly 50,000 Minnesota construction jobs. Gone.

Here are Bureau of Labor Statistics data on employment in the Minnesota construction industry since 1990 (click on the chart for a larger view).

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We’re struck by a few things in that chart.

Minnesota construction weathered the milder recessions in the early 1990s and early 2000s pretty well, with small dips and quick rebounds that no doubt helped pull the state out of those downturns.

There’s no way housing starts or construction will save us this time.

We’re basically at the employment level for construction we saw at the end of 1995. So ten years of employment growth in Minnesota was wiped out in the past five.

Nationally, construction employment is down about 25 percent from the start of the recession in December 2007; it’s down closer to 30 percent in Minnesota.

As we’ve noted, markets recover. But how long will it take for construction, overbuilt in the glory days, to come back? What happens to the people who built the Twin Cities but can’t afford to live here now?

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  • Dave Semerad

    This is not new information. The Minnesota construction industry has been in a depression, not recession. The Building Jobs Coalition is doing something about it, and with all the campaign promises of jobs, jobs, jobs, now is the time for those promises to be fulfilled with action and leadership. We will soon find out who at the Capitol can lead, and who can’t.