Remember all those construction jobs?
They’re not coming back in the foreseeable future.
That’s the conclusion of Doug Walls, research analyst for the Arizona Office of Economic Opportunity.
On Thursday, Walls said the state’s seasonally adjusted unemployment rate for September was 5.5 percent, back to where it was in April before the rate spiked.
Overall, private sector employment last month increased by just 3,800 workers. But the jobless rate declined at least in part because of 28,900 new government workers, mainly employees of state and local colleges and schools returning after the summer recess.
Arizona did add 2,700 construction jobs last month and 10,400 since the same time last year.
But that still leaves overall construction employment at 139,200. Prior to the recession there were 244,300 people working in the industry, close to one out of every 11 Arizonans employed.
Walls suggested that was an artificial — and unsustainable — level of employment.
“Before the recession, construction employment increased dramatically very quickly,” he said.
That was during the housing bubble, with home builders in Arizona putting up houses as fast as they could under the premise that there would always be buyers. For a long time that was true, with banks and other lenders willing to provide mortgages to those with questionable credit under the premise that the ever-increasing value of the homes made them a good risk.
When the bottom dropped out, hundreds of thousands of Arizonans found themselves “upside-down,” owing more on their homes than they were worth. Many homeowners simply walked away, leaving the state with a glut of vacant properties.
The industry hit rock bottom soon after, with employment plummeting by September 2006 to fewer than 110,000.
Construction is not the only weak part of the state’s economy.
Manufacturing employment last month was 158,000, down about 600 from the same period a year earlier. That’s just 10,000 above the bottom the industry hit in September 2010.
