State construction unemployment rates end poorly in 2020

Construction unemployment numbers for 2020 aren’t positive, but they’re better than some other employment sectors

The U.S. continues to struggle with the economic effects of the Covid-19 pandemic, however construction employment is performing better than many other occupational groups, according to a state-by-state analysis of data from the U.S. Bureau of Labor Statistics.

In December 2020, on a year-over-year basis, not seasonally adjusted (NSA) construction unemployment rates rose nationally and in 48 states, with employment down 125,000 from December 2019, according to an analysis of the data by Associated Builders and Contractors (ABC). National construction employment, however, was only 3% below its pre-pandemic peak in February 2020 on a seasonally adjusted basis.

By comparison, overall non-farm payroll employment was down 6.5% from its peak in February 2020. The combination of the pandemic and winter weather resulted in an increase in not seasonally adjusted construction unemployment rates for the nation and most states.

The national NSA construction unemployment rate went from 5.5% in February 2020 to 9.6% in December 2020, up 4.1%. Among the states, only Nebraska and West Virginia had lower estimated NSA construction unemployment rates over that same period.

From December 2019 to December 2020, the rate rose 4.6%, from 5% to 9.6%. Over that same period, only two states - Nebraska and South Dakota - had lower rates.

“With the distribution of vaccines, there is now a path to defeating Covid-19 and returning the economy and the construction industry to its pre-pandemic levels,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “The speed with which we enter a new normal depends on how fast these vaccines are delivered and how much of the population is vaccinated.

“Federal spending to support the economy is also key,” Markstein said. “Spending on much-needed repairs to improve the nation’s infrastructure will benefit both the construction industry and the economy’s long-term growth prospects.”

Recent month-to-month fluctuations

Because these industry-specific rates are not seasonally adjusted, national and state-level unemployment rates are best evaluated on a year-over-year basis. However, due to the uncertainty caused by the pandemic, month-to-month comparisons are useful.

The national NSA construction unemployment rate was up 2.3% from November 2020 to December 2020. Since the data series began in 2000, the historical pattern of change in rates from November has been an increase every year. Among the states, 45 had higher estimated construction unemployment rates than in November, four had lower rates, and one was unchanged (Montana).

Top five states

The states with the lowest December 2020 estimated NSA construction unemployment rates in order from lowest to highest were:

• Utah, 3.6%
• Nebraska, 3.7%
• North Carolina, 4.5%
• South Carolina, 4.9%
• South Dakota, 5%

All of these states except for South Dakota were in the top five in November 2020. Utah had the lowest rate in December and November.

Bottom five states

The states with the highest December 2020 estimated NSA construction unemployment rates in order from lowest to highest were:

• Alaska, 17.3%
• North Dakota, 17.5%
• Michigan, 17.8%
• Hawaii, 22.6%
• Rhode Island, 25.6%

All of these states were in the bottom five in November. Rhode Island had the highest estimated construction unemployment rate in December compared to second highest in November. This was the state’s second highest December rate on record, behind the 26.5% rate in December 2009.