On the Map: Construction Concentration=Wrenching Recovery

by Alec Friedhoff, Richard Shearer | July 8, 2010

Last week’s jobs report turned out to be a general disappointment, but it was probably especially troubling to metros that rely heavily on construction for jobs and output. That industry shed another 22,000 jobs in June, completely wiping out small gains it had made in February and March of this year. Since the start of the national recession in December of 2007, construction has lost a whopping 1.9 million jobs—or more than a quarter of its pre-recession employment level.

Not surprisingly, metros across the country are not absorbing these declines uniformly. Brookings’ State of Metropolitan America report examines the factors shaping today’s metros and thus shaping the nation, including employment by industry.  In 2007, nine metro areas--all of them in the Sun Belt--relied on construction for more than 10 percent of their total employment (see map below the fold). Another 18 metros--mostly in the South and West--had employment shares between 9 and 10 percent.

How are these construction-centric metros faring today? Not coincidentally, their economies are among those that have been hit hardest by the housing bust and subsequent recession according to the MetroMonitor. Of those nine metros that relied on construction for at least 10 percent of employment, seven had lost more than 11 percent of their pre-recession job-levels by the first quarter of this year. Cape Coral, which had the highest concentration of construction employment in the country in 2007, had lost 16.4 percent of its peak employment level (which it reached in the fourth quarter of 2006).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As the nation steps gingerly along the path to recovery, serious questions remain as to how the hardest hit of these places will fare. Consumption has played an oversized role in the economies of many of these metro areas, as further evidenced by high concentrations of jobs in industries like wholesale and retail trade and/or leisure and hospitality. Many of these metro areas would probably benefit from a rebalancing toward a more diversified base of export industries. In practice, change along these lines can be a tall order for government, non-profit, and business leaders. This is not to say these leaders can’t be effective, however real change of this kind probably couldn’t occur for another decade or so, simply because these things take time. In the short to medium term, prosperity will be tied to the strength of the consumer and how protracted the recovery proves to be. To be sure, the Cape Corals and Las Vegases of the world won’t be returning to 40 percent growth rates any time soon, if ever.

Source URL: http://www.newrepublic.com//blog/the-avenue/76129/the-map-construction-concentrationwrenching-recovery