Construction Jobs in Jeopardy

Potential bust of Highway Trust Fund could hit valuable c-store customer

Construction workers (CSP Daily News / Convenience Stores)

ARLINGTON, Va. -- Construction workers are a key convenience store consumer, over-indexing on many of the biggest in-store categories. But according to a recent analysis, an uptick in construction industry employment may hit the wall if the Highway Trust Fund is allowed to go bust this summer.

An analysis of federal employment data by the Associated General Contractors of America (AGC), an association representing the construction industry, reveals that construction employment grew in 197 metropolitan areas between March 2013 and March 2014, fell in 87 and refused to budge in 55. Among those on the upswing: Los Angeles-Long Beach-Glendale, Calif., which posted the biggest gain in number of construction jobs, up 10,000 jobs, or a 9% increase. It was followed by Santa Ana-Anaheim-Irvine, Calif. (+9,100 jobs, +12%) and Dallas-Plano-Irving, Texas (+6,200 jobs, +6%). The largest percentage gains happened in Monroe, Mich. (+43%, or 900 jobs), El Centro, Calif. (+37%, +700 jobs), Pascagoula, Miss. (+35%, +1,900 jobs) and Lewiston, Idaho-Wash. (up 33%, or 300 additional jobs).

The biggest losses from March 2013 to March 2014: Gary, Ind. (down 5,400 jobs, or off 28%), Bethesda-Rockville-Frederick, Md. (-3,000 jobs, -10%), Putnam-Rockland-Westchester, N.Y. (-2,200 jobs, -8%) and Rochester, N.Y. (-1,400 jobs, -9%). Gary, Ind., also was hit by the biggest percentage decline in this time period, followed by Yuba City, Calif. (-13%, -200 jobs), Elkhart-Goshen, Ind. (-12%, -300 jobs), and Sandusky, Ohio (-11%, -100 jobs).

Despite employment growth in more than one-half of the metro areas between March 2013 and March 2014, officials at the AGC warned that construction employment will see greater losses across the board if Congress does not address the looming shortfall in the Highway Trust Fund, which is projected to happen this summer. The Highway Trust Fund, which is fed by the federal excise fuel tax and funds federal interstate construction and maintenance, is running short as fuel demand--and revenues--slip.

The tax has not increased since 1990, and there is an ongoing debate in Congress whether to increase it or address the shortfall through other means such as a new vehicle miles traveled tax or expanded tolling. Meanwhile, a transportation funding bill that has kept the fund afloat for the past few years is set to expire in September.

Ken Simonson, the AGC's chief economist, noted in a press release on the analysis that much of the United States has enjoyed "relatively robust growth" in construction employment over the past year. "But the fact construction employment remains below prior peak levels in most areas shows just how hard hit the industry was during the downturn and how vulnerable it is to disruptions, such as a potential lapse in federal highway funding," he said.

Among the 27 metro areas that were able to top or meet their prior March construction employment peak, Pascagoula, Miss., enjoyed the biggest percentage increase (+26%, or 1,500 jobs more than March 2008). Baton Rouge, La., gained the most number of jobs since it reached its prior March peak in 2013 (+3,400 jobs). Meanwhile, Phoenix-Mesa-Glendale, Ariz., saw the biggest drop in total number of construction jobs, or down 86,300 jobs, compared to its prior March 2006 peak. Another Arizona market--Lake Havasu City-Kingman--suffered the largest percentage decline, off 69% from its March 2006 peak.

The AGC is optimistic, however, that the government will resolve the Highway Trust Fund shortfall. This week the Obama Administration proposed a new transportation bill, the Grow America Act, a four-year, $302 billion spending bill that attempts to fix the funding deficit partly by lifting the prohibition of tolling on existing free interstate highways. While the AGC stopped short of endorsing this particular fix to the issue, association CEO Stephen Sandherr said that the proposal would "accelerate debate and action" on a new highway and transit bill to replace current transportation funding legislation expiring at the end of September, and demonstrates that the administration will play an active role.

"It would be an economic travesty to put thousands out of work and undermine the construction industry's recovery because Washington officials don't fix a problem they've known about for months," said Sandherr. "This isn't the kind of summer break hard-working crafts men and women expect or deserve."