Washington, DC Not seasonally adjusted (NSA) construction unemployment rates improved in 43 states and the nation on a year-over-year basis in July according to analysis released by Associated Builders and Contractors (ABC). The national NSA construction unemployment rate of 4.5% was 1% lower than a year ago according to data from the Bureau of Labor Statistics (BLS). Further, the industry boasted its lowest July rate since 2000 when July’s rate was 4.4% rate. BLS data also showed that the industry employed 209,000 more people than in July 2015.
“The drop in the construction unemployment rate from July 2015 adds yet another month to the unbroken monthly series of year-over-year rate decreases that started in October 2010,” said economist Bernard Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Starting in 2000, when the BLS data for this series begins, the July national NSA construction unemployment rate has generally fallen from June every year. In two years – 2006 and 2009 – it rose, and in two years – 2002 and 2007 – it was unchanged. Given that these are not seasonally adjusted data and that construction activity normally continues to rise nationwide in the summer months, this outcome is to be expected. This year’s decrease of 0.1% from June is no exception.”
For the third month in a row, the estimated construction unemployment rates for all the states were below 10%. The last time that happened was from June to August 2005.
Several states with low construction unemployment rates and rising construction employment experienced upticks in their estimated construction unemployment rates from June. This is likely due to unemployed construction workers in other states moving to those states in search of employment. Also, some unemployed construction workers who dropped out of the workforce (i.e., stopped looking for work) may have returned to the workforce in search of employment, further boosting that state’s construction unemployment rate even in the face of rising construction employment.
The Top Five States
The five states with the lowest estimated NSA construction unemployment rates in order from lowest rate to highest were:
1. Idaho
2. Vermont
3. North Dakota
4. Colorado
5. South Dakota
Three states – Colorado, Idaho and Vermont – were also among the top five in June.
Idaho, with a 1.7% construction unemployment rate, had the lowest rate among the states in July. This was up from fourth lowest rate in June based on revised data (previously reported as the third lowest rate, tied with Iowa). It was also the lowest Idaho July construction unemployment rate since the series began in 2000.
Vermont slipped from lowest rate in May and June to second lowest rate in July with a 2% rate. As with Idaho, this was Vermont’s lowest July estimated construction unemployment rate since the beginning of the series in 2000. That was in spite of a slight rise in its rate from 1.9% in June, possibly due to attracting out of work construction workers from other states in search of employment.
North Dakota had the third lowest rate in July, with a 2.1% rate. That is an improvement from 10th lowest in June. Nonetheless, the state continues to feel the fallout from lower energy prices. Although a 2.1% construction unemployment rate would be the envy of most states, it is the highest July rate for the state since July 2010’s 2.7% rate. While construction activity has picked up in North Dakota, it is likely that many unemployed construction workers have left the state to seek work elsewhere.
Colorado fell to fourth lowest rate in July from second lowest in June. Colorado’s 2.2% rate was its lowest July construction unemployment rate since July 2000’s 1.9% rate.
Meanwhile, Iowa, which tied with Colorado for the second lowest rate in June based on revised data (previously reported as tied for third lowest rate with Idaho), dropped to 11th lowest in July with a 2.9% construction unemployment rate. This was up 0.7% from June’s rate, the largest monthly increase among the states. In spite of this increase, the 2.9% rate was the state’s lowest July rate since the 2.3% rate in July 2000. Given that construction activity is healthy in the state, Iowa may be attracting unemployed construction workers from other states in search of work.
South Dakota, with a 2.3% rate, improved to fifth lowest rate in July from ninth lowest in June. It was also the state’s lowest estimated July rate since its 1.4% rate in July 2007. Although the state benefits from the energy sector, it is much less reliant on oil and gas than its northern neighbor, North Dakota. Its vibrant agricultural sector has offset the slowdown in the oil patch. South Dakota had the lowest overall NSA unemployment rate in the country, suggesting that there are opportunities in other industries for those construction workers who could not find jobs in construction.
The Bottom Five States
The five states with the highest estimated NSA construction unemployment rates (from lowest to highest) were:
46. Illinois and Louisiana (tie)
48. Alabama
49. Rhode Island
50. New Mexico
Four of the five states with the highest construction unemployment rates in June were the same as in May – Alabama, Illinois, New Mexico and Rhode Island. New Mexico, with a 7.8% rate, had the highest estimated NSA construction unemployment rate in July, compared to second highest in June. The state also had the highest overall NSA unemployment rate among the states, 7.1%. One positive is that the state’s construction unemployment rate was down 1.1% from July 2015.
Rhode Island had the second highest construction unemployment rate in July, 7.2%. In June, it had the third highest rate. This was the state’s lowest July rate since July 2007’s 6.5% rate.
Alabama had the third highest rate in July, 7%, its lowest July rate since July 2007’s 5.4% rate. In June, it had the highest rate in the nation. Alabama had the second largest monthly decline in its rate from June (down 0.9%) after Mississippi.
Illinois and Louisiana had the fourth highest estimated NSA construction unemployment rate in July, 6.4%. In June, Illinois had the fifth highest rate along with Mississippi based on revised data (previously reported as the sixth highest rate). July’s rate was Illinois’ lowest July reading since the 5.7% rate in July 2001. Louisiana had the seventh highest rate in June, along with Pennsylvania. Clearly, Louisiana is suffering from the effects of lower energy prices. The state’s overall NSA unemployment rate of 6.9% was the second highest in the nation.
Mississippi, which had the fifth highest estimated construction unemployment rate in June, had the 13th highest rate in July, 5.3%, along with Arkansas. Mississippi also had the largest monthly decrease in its rate, down 1.1% from June. Also, it was the lowest July construction unemployment rate for both states since 2000 when the estimates begin. Finally, Arkansas had the third largest year-over-year drop in its rate (down 2.2%) after Tennessee (down 2.6%) and West Virginia (down 2.3%).