By Bernard M. Markstein, Ph.D.
The March not seasonally adjusted (NSA) construction unemployment rates for the country and 30 states were lower than in March 2015, according to analysis by economist Bernard Markstein released today by Associated Builders and Contractors. March’s 0.8 percent decrease from a year ago marked five and a half years of consecutive monthly year-over-year rate declines. Meanwhile, March national NSA employment in construction was 298,000 higher than in March 2015.
Historically, March has been the changeover month in which construction begins to pick up from the winter doldrums as the weather improves. The upswing in NSA construction employment typically results in a reduction in the NSA construction unemployment rate for the nation and many of the states. Since 2000, the March national construction unemployment rate was down from February every year except for two years—2008 and 2012.
However, this past winter was not a normal winter. It was characterized by above normal temperatures over a good part of the season in much of the country. Further, precipitation in March was above normal in parts of the Southwest and upper Midwest, resulting in significant flooding in some of these states. The following states had near record precipitation in March: Arkansas, Louisiana, Michigan, Mississippi, Texas, Washington and Wisconsin. As a result, the March national NSA construction unemployment rate was unchanged from February’s 8.7 percent rate.
The Top Five States
The five states with the lowest construction unemployment rates in March in order from lowest rate to highest were:
* Unemployment rate is for construction, mining, and logging combined
Four states—Colorado, Georgia, Hawaii and Virginia—were also among the top five in February. Colorado, with a 3.9 percent estimated construction unemployment rate, had the lowest rate among the states in March. That was an improvement from the second lowest rate in February. Although the state had a significant drop in its rate from March 2015, down 3.2 percent, that was only the sixth largest decline among the states.
Nebraska had the second lowest construction unemployment rate with a 4.6 percent rate. That was up from seventh lowest rate in February, tied with Arizona. The state also had the second largest decrease in its rate from February, down 2.2 percent.
Hawaii held on to its ranking as the third lowest rate in February, based on revised data (previously reported as the second highest rate, tied with Colorado), with a 4.9 percent rate in March. It also had the fifth largest reduction in its rate from March 2015, down 3.5 percent.
Georgia, although still among the states with the five lowest rates, fell from the lowest rate in February to the fourth lowest rate in March as its estimated construction unemployment rate rose from 4.7 percent to 5.1 percent. Nonetheless, Georgia’s rate was down 1.2 percent from March 2015. The rise in Georgia’s rate may have been due to unemployed construction workers who had previously stopped looking for work reentering the workforce and the state attracting unemployed construction workers from out of state.
Virginia also experienced an increase in its construction unemployment rate in March to 5.7 percent from 5.3 percent in February. The March rate was the fifth lowest rate among the states, compared to fourth lowest rate the month before. Like Georgia, Virginia may have suffered from attracting unemployed construction workers into the state’s workforce from the sidelines and from out of state.
The unusually large amount of precipitation in Texas in March likely contributed to a rise in its construction unemployment rate from 5.8 percent in February to 6.4 percent in March. That dropped the rank of the Lone Star state from fifth lowest in February to seventh lowest in March. The state’s 0.6 percent rate increase from February was the third highest increase among the states. Other states with the same monthly increase were Arizona, Oregon and Washington.
The Bottom Five States
The five states with the highest construction unemployment rates (from lowest to highest) were:
46. North Dakota
47. New Mexico
49. West Virginia
Three of the five states with the highest estimated construction unemployment rates in March—Alaska, North Dakota and West Virginia—were the same as in February.
Following true to form given that these are NSA rates, Alaska with a 19 percent rate in March had the highest rate for the seventh consecutive month. March’s rate was down 0.4 percent from February’s 19.4 percent rate (based on revised data). A reduction in the March rate from February is somewhat common for Alaska, which has experienced a decline in 12 of the previous 16 years. However, for the third month in a row, Alaska’s construction unemployment rate increased on a year-over-year basis, up 2.8 percent compared to March 2015. This rise was the third largest increase among the states. Low oil prices were a likely a major contributor to the year-over-year rise in the rate.
West Virginia, with a 15.5 percent construction unemployment rate, had the second highest rate for the second month running. Although the state had the seventh largest monthly rate decline in March (down 1.6 percent), it also had the fifth biggest year-over-year rate increase (up 1.7 percent).
Illinois had the third highest March construction unemployment rate (14.3 percent). In February, the state had the sixth highest rate. Illinois also had the fourth largest year-over-year increase among the states in March (up 2 percent).
New Mexico had the fourth highest estimated construction unemployment rate (14.2 percent). In February, the state had the ninth highest rate. Although its rate was down 0.6 percent from March 2015, the state had the largest increase from February among the states, up 1.5 percent.
North Dakota, still feeling the effects of the downturn in energy prices, maintained its February ranking of fifth highest construction unemployment rate with its March rate of 14.1 percent. That rate was down a full 1 percent from February (ninth largest monthly decline along with Vermont), but was also the second largest year-over-year increase (up 4 percent).
Also of note, Rhode Island, which had the third highest construction unemployment rate in February (15.7 percent), improved to sixth highest with a 13.7 percent rate. The 2 percent monthly decline was the fourth largest among the states. Further, the Ocean State had the largest year-over-year drop in its rate, down 4 percent.
Wyoming was at the other end of the spectrum in March with the largest year-over-year increase in its rate, up 4.5 percent. On the positive side, its March rate was down 1.8 percent from February, the sixth largest decline among the states. Also, the state’s March 13.5 percent rate moved it from fourth highest rate in January and February to seventh highest in March.
To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates.