Construction employment is trudging along steadily toward some sort of respectability, but it’s still miles from its heyday during 2006-2008, according to the most recent Bureau of Labor Statistics data.
Data for last month showed that overall construction employment has increased marginally (+0.1%) over Sept. 2011 to approximately 5.77 million workers, but it’s still off approximately 25% from its recent high in 2006, when it topped out at an annual average of 6.97 million workers.
Electrical contractor employment, which according to BLS data accounts for approximately 13% of total construction employment, is also moving in the right direction, and the Aug. 2012 figure of 743,500 employees at electrical contracting firms is up 1.1% from Aug. 2011. But it’s still down approximately 21% from its recent peak in Oct. 2007, when it hit 943,700.
Employment stats should be of interest to more than just the stat-geeks in the electrical market, as you can use them to estimate the market potential of key customer groups for electrical distributors. For instance, according to Electrical Wholesaling’s market-tested sales multipliers, developed by Andrea Herbert, the magazine’s late chief editor back in the 1970s and updated every few years, each employee at an electrical contracting firm represents $43,880 in sales potential. Dramatic swings in employment can have a huge impact on the market potential. For instance, although EW estimates the market potential of electrical contractors for electrical distributors on a national basis is approximately $32.6 billion, that figure was closer to $40 billion at the market’s peak in 2007. Current market potential estimates for electrical contractors, as well as the MRO, OEM, factory automation, government and commercial market segments — which account for an estimated 75% of all distributor sales — are available for all 50 states on this page.
The most recent BLS data construction employment data, available down to Metropolitan Statistical Area (MSA), offers a rough idea of the construction climate in local markets. The most recent report contained some surprises, with two MSAs that you wouldn’t think of sporting the highest YTY growth through August 2012 in construction employment. Yuba City, Calif., added the highest percentage of new construction jobs (24%, 400 jobs) followed by Pascagoula, Miss. (21%, 1,000 jobs). A report in California’s Appeal-Democrat said two construction projects now underway probably accounted for much of the growth — a new campus for the Yuba Community College District and the new wing of the Rideout Health Center in Marysville, Calif. The Pascagoula area’s construction industry is benefitting from the $65 million expansion of a Chevron refinery now underway, according to KBR, a Houston-based engineering firm involved with the project.
According to an analysis of the BLS construction employment data by Associated General Contractors, Washington, D.C., the other MSAs showing the most growth from Aug. 2011 to Aug. 2012 were Bakersfield-Delano, Calif. (17%, 2,500 jobs); El Centro, Calif. (15%, 200 jobs); Los Angeles-Long Beach-Glendale, Calif. (8,600 jobs, 8%); Houston-Sugar Land-Baytown, Texas (6,900 jobs, 4%); Phoenix-Mesa-Glendale, Ariz. (6,300 jobs, 7%); Fort Worth-Arlington, Texas (5,100 jobs, 9%); and Portland-Vancouver-Hillsboro, Ore.-Wash. (4,700 jobs, 10%).
On the flip side, the AGC analysis reported that the largest job losses were in Atlanta-Sandy Springs-Marietta, Ga. (-7,200 jobs, -8%); Tampa-St. Petersburg-Clearwater, Fla. (-6,700 jobs, -12%); New York (-6,200 jobs, -5%) and Philadelphia (-4,300 jobs, -6%). Other MSAs reporting large losses in construction jobs were Springfield, Mass.-Conn. (-31%, -3,700 jobs); Anchorage, Alaska (-21%, -2,200 jobs); Jackson, Miss. (-21%, -2,300 jobs) and Lansing-East Lansing, Mich. (-18%, -1,200 jobs).
