Construction employment declined by 20,000 jobs in November while the industry’s unemployment rate hit 12.2%, according to an analysis of new federal data recently released by the Associated General Contractors of America. The construction employment figures likely reflect the fact many contractors have already cut staff and delayed hiring new employees because of the threat of the “fiscal cliff,” according to results of a survey of member firms the association also released.
“It is discouraging that construction employment is still struggling after more three years of expansion in the overall economy,” said Ken Simonson, the association’s chief economist. “As disappointing as these numbers are, they will only get worse if Congress and the White House allow huge tax increases and spending cuts to occur on January 1.”
These tax increases are actually the expiration of middle class tax cuts enacted by a Democratic Congress and signed by President Bush, which are set to automatically expire unless renewed. The resulting burden on middle class taxpayers will reduce consumer spending, which, coupled with spending cuts–including $6 billion in Federal construction programs–may result in the already-fragile economy entering another recession.
Fifty-four percent of firms report the threat of tax hikes has forced them to adjust their business plans. Among those firms, 67% report postponing hiring, 65% report delaying or cancelling capital expenditures and 32% report having already made layoffs.
