Construction Unemployment Rates Decrease In 20 States Despite Pandemic Challenges

The construction industry faced significant employment challenges in 2020 due to the COVID-19 pandemic, with job losses occurring nationwide as restrictions and economic slowdowns took hold. However, despite these widespread difficulties, twenty states managed to improve their construction employment rates, demonstrating resilience in a time of uncertainty. According to a report from the Associated Builders and Contractors (ABC), construction jobs declined sharply at a national level, but in certain states, local market dynamics and economic conditions allowed for a quicker recovery. Although the overall job market was heavily impacted, construction proved to be one of the more stable sectors, rebounding faster than many other industries.

While the national construction unemployment rate increased by 1.6 percent since February, the job market in twenty states showed surprising strength by September. This divergence highlights the uneven economic recovery taking place across the country, with some regions managing to sustain or even grow employment levels. Bernard Markstein, president and chief economist of Markstein Advisors, conducted an analysis for ABC, emphasizing that construction had performed better than many other fields due to its ability to implement safety measures and maintain work operations. He noted that the biggest challenges remained local outbreaks and corresponding restrictions, which had a greater influence on job losses than the construction industry’s own limitations.

Compared to 2019, the total number of construction workers in 2020 declined significantly, reflecting the broader economic slowdown. However, the non-seasonally adjusted (NSA) construction unemployment rate showed improvement in 37 states, with only 12 states experiencing increases. In New Hampshire, employment figures remained steady. Additionally, national NSA construction employment was 214,000 higher in February 2019 than in 2020, underscoring the effects of the pandemic on the workforce. Despite the setbacks, the industry's ability to retain a significant number of workers indicated a degree of resilience not seen in many other job sectors.

The first significant signs of distress emerged in March when local restrictions began taking effect. At that time, only eight states managed to reduce their number of unemployed construction workers compared to the previous year, while 41 states saw an increase. Indiana remained the only state with stable employment levels. Overall, construction employment in the U.S. rose by 125,000 in March compared to the same month in 2019, but this was not enough to offset the growing unemployment trends caused by pandemic-related restrictions. The numbers soon took a turn for the worse as lockdowns became more widespread.

April and May were particularly painful months for the industry, as employment typically picks up during this period due to seasonal demand. Instead, construction unemployment rates rose in all 50 states compared to 2019. Job losses were staggering, with 912,000 positions eliminated in April and another 464,000 in May. These figures represented some of the most significant workforce reductions seen in recent history. Construction companies struggled with operational shutdowns, supply chain disruptions, and the uncertainty of when projects would resume. These difficulties contributed to widespread layoffs, which continued well into the summer.

The employment situation remained dire in June and July, with nearly half of all states experiencing an increase in construction unemployment rates compared to the previous year. The industry shed 334,000 jobs in June and another 326,000 in July, signaling a slow recovery process. The only state that managed to improve its employment figures during this time was Kentucky, which saw minor growth in both months. As many construction projects remained on hold due to government restrictions and economic uncertainty, job recovery was uneven and dependent on local policies.

By August and September, unemployment rates in the construction sector remained higher across all 50 states compared to the previous year. Job losses continued, with 299,000 positions disappearing in August and 285,000 in September. While some states showed slight signs of stabilization, the overall industry struggled to return to pre-pandemic employment levels. Even in regions where construction work had resumed, challenges such as material shortages and social distancing requirements slowed progress, preventing a full workforce recovery.

Despite these difficulties, the national NSA construction unemployment rate saw a notable decline after reaching its peak at 16.6 percent in April. By September, the rate had dropped to 7 percent, significantly improving from its February level of 5.5 percent. This reduction indicated that while the industry still faced challenges, it was on a path to gradual recovery. The easing of restrictions, combined with increased investments in infrastructure projects, played a crucial role in stabilizing employment figures across many states.

Analysts noted that comparing national and state-level unemployment rates year over year provides the most accurate measure of industry recovery, given that these figures are not seasonally adjusted. However, in a rapidly changing economic environment, month-to-month comparisons also offered valuable insights. The unpredictable nature of the pandemic meant that construction employment trends could shift quickly, requiring careful monitoring by industry professionals and policymakers.

Moving forward, the construction industry’s resilience will likely depend on several key factors, including the progress of vaccination efforts, government stimulus measures, and the overall economic recovery. While some states have already demonstrated an ability to bounce back, others may continue to struggle with long-term employment impacts. The industry has proven its adaptability, but sustained growth will require continued investment, innovation, and workforce support.

Despite the uncertainty of the past year, construction remains a critical component of the U.S. economy, providing jobs and driving infrastructure development. The ability of 20 states to improve their employment rates despite the broader economic downturn serves as a testament to the industry's strength and potential. While challenges remain, the gradual decline in unemployment rates suggests that construction may continue to be a leading force in economic recovery as the nation moves beyond the immediate effects of the pandemic.