Economist Notes Arkansas’ Big Gains In Construction Jobs

Arkansas had the nation’s sixth highest increase in construction employment from September 2013 to September 2014, according to Ken Simonson, chief economist with the Associated General Contractors of America.

Simonson was in Little Rock Thursday to speak at the state AGC’s annual meeting. He said Arkansas’ 9.9% increase was almost triple the U.S. rate of 3.9% and was the state’s largest year-over-year gain since the recession.

According to the Arkansas Department of Workforce Services September 2014 nonfarm payroll job summary, construction jobs have risen by 4,700 workers since one year ago. There are now an estimated 50,700 construction workers in the state.

“This is a great time for me to be coming to Arkansas because you’ve suddenly landed at the top of the league standings,” he said in an interview with Talk Business & Politics.

Simonson said the state’s highway construction program explained much of the increase. Surrounding states “have been starving their highway program,” he said.

The Little Rock metropolitan statistical area saw an 11% increase, while the Northwest Arkansas MSA, which includes one Missouri county, saw a 10% gain. The Memphis MSA saw a 4% increase. Fort Smith saw an 8% drop, though Simonson added that a small market can see big swings based on the projects being undertaken.

Construction was hit harder than any other industry during the recession, Simonson said. Nationwide, it lost 2.3 million workers from 2006 to 2011 – a 30% drop. “It was really a five-year depression, whereas the economy as a whole had a severe recession,” he said.

A survey by AGC of its membership found that 83% of respondents were having trouble filling craft positions – the most common shortage being carpenters. Forty-eight percent said they were struggling to find project managers and supervisors.

Simonson said that, nationwide, the trend has been toward multi-family housing construction. Single-family housing in the U.S. hasn’t been meeting projections. Explanations include young people are waiting to have children, credit is harder to obtain, student debt is high, and people are still gun-shy after the housing bust.

“The single-family housing market has been pretty lame, I have to say,” he said.

However, Simonson sees several growth sectors in the near future. He anticipated areas of strong construction would include the oil and gas industry, railroads, hotels, and construction in preparation for the changes in trade routes as a result of the widening of the Panama Canal.