America hiring blue collar workers again

construction_workers.gi.top.jpg By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- Construction and manufacturing workers got some slightly better news from the government's jobs report on Friday.

Those industries each added 33,000 jobs in February. It was the biggest one-month gain for construction workers in nearly four years. And in manufacturing, February's increase rounded off the strongest three-month winning streak in 16 years.

But that doesn't mean either industry is out of the woods just yet.

Part of February's gains could mark a temporary rebound from extreme winter weather in December and January, said Kenneth D. Simonson, chief economist for the Associated General Contractors of America.

However, he still forecasts further growth in construction jobs this year, albeit at a slower pace than some other sectors of the economy.

"The best face I can put on these numbers is construction is close to the bottom, and we should start to see a gradual upturn over the rest of this year," he said.

Construction was the hardest hit sector of the economy in the recession. Struck early by the burst of the housing bubble, the industry started its decline in April 2006. Over that time period, 2.2 million American construction workers lost their jobs as spending on building projects plunged 35%.

Despite the one-month uptick, construction unemployment is at a staggering 21.8%, the worst of any single industry.

The manufacturing sector is slightly better off though. Factory jobs have been on an almost constant decline since their peak in 1979, as Americans look to foreign countries for cheaper exports.

But the unemployment rate in manufacturing was at 9.9% in February -- only a percentage point higher than the overall unemployment rate.

"It was the first part of the economy that came back, even though manufacturing's size relative to the overall economy has declined over the last 30 years," said T.C. Robillard, an analyst who covers the stocks of large staffing firms with Signal Hill.

As the slightly improving numbers point to some green shoots, where is the new job growth coming from?

Where the jobs are

In February, specialty trade contractors -- including plumbers, concrete workers and electricians -- made up for a whopping 28,000 of the 33,000 jobs added in construction.

Heavy and civil engineering firms added 4,500 jobs, and general homebuilding contractors added 2,000 jobs. Meanwhile, general contractors who build nonresidential structures -- like offices and hospitals -- cut their payrolls.

The Labor Department doesn't break out the specific sectors of the manufacturing industry by job figures, but does provide an unemployment rate for two different types of factories.

The jobless rate for workers who make non-durable goods -- products like food and clothing that consumers buy often and use quickly -- was 8.9% Workers who make longer-lasting products like heavy equipment, cars and furniture have a higher jobless rate of 10.5%.

Economists say there's some comfort in firmer jobs numbers in manufacturing. Other reports are hinting at signs of strength lately as well. Earlier this week, the Institute for Supply Management's manufacturing index climbed to its highest level in nearly seven years.

That said, the overall economy is still on shaky ground.

As oil and commodities prices have climbed lately, economists are starting to question whether paying more on food and gas will cut significantly into consumer and business spending. That could hold back the manufacturing sector even more.

At the same time, stimulus spending on infrastructure projects is winding down and home prices are still near their post-recession lows -- neither of which make a strong case for construction.

"Clearly the housing situation is still an ankle weight as far as the economy is concerned," Robillard said. "There are a lot of people who think housing is flirting with a double dip, and residential construction seems to still be struggling." To top of page

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