Phoenix construction employment sees sharp slump

Above: A construction worker helps build the $100 million Creighton University Health Sciences — Phoenix Campus at Park Central on Tuesday, March 17, 2020. (Photos by Mike Mertes, AZ Big Media) Real Estate | 5 Aug, 2020 |

The Phoenix metro area had the fourth-largest decline in construction employment during the past 12 months as the coronavirus derailed the region’s once-thriving industry, according to an analysis released by the Associated General Contractors of America today. Association officials urged government officials to enact liability reform, boost infrastructure investments and extend tax credits to help the industry recover and rebuild. 

“The coronavirus has led to a sudden decline in demand that has had a dramatic impact on construction employment in the Phoenix area,” said Ken Simonson, the association’s chief economist. “The Phoenix metro areas has gone from one of the fastest-growing construction job markets to an area that has lost more construction jobs than most other parts of the country.” 

Simonson noted that construction employment in Phoenix declined by 2,600 between June 2019 and June 2020, a 2 percent decline. Phoenix had the 4th-largest total loss in construction jobs out of the 358 metro areas the association tracks. The construction employment decline was the largest annual drop for Phoenix since 2010. Construction employment also declined over the past 12 months by 500 jobs in Yuma and 400 jobs in Flagstaff, while increasing by 500 jobs in Tucson, 200 jobs in Prescott and 100 jobs in Sierra Vista-Douglas. 

Officials from Procore, a construction technology firm based in Santa Barbara, California, also released new data showing a decline in Phoenix-area jobsite worker hours among construction firms using Procore’s platform. Hours increased from the first week of March until early May but dropped at double-digit rates from then through mid-July, consistent with a further decline in construction employment. 

The construction economist said that the Phoenix metro area was not alone. Nationwide, 225 out of 358 metro areas lost construction jobs for the year, while construction employment was stagnant in another 39 areas. He added that new coronavirus relief measures would help in other metro areas as well that are likely to see construction employment declines amid prolonged economic shutdowns.

Simonson noted that Senate Republican leaders released a new coronavirus recovery measure earlier this week. He noted that the Senate measure includes provisions that can help construction firms rebuild their payrolls. These include liability reforms so construction firms that are protecting workers from the coronavirus will not be subject to needless litigation. The proposal also includes improvement to the Paycheck Protection Program and an expansion of the Employee Retention Tax Credit the association supports. 

While the measure also addresses unemployment insurance and workforce development, it fails to include the kind of infrastructure funding included in the proposal that the House passed in May, the economist said. That new funding is needed to address a projected $37 billion state transportation funding shortfall, fix aging public facilities and help retrofit structures to protect students and others from the coronavirus. 

The construction official added that the association and its local chapters, the Arizona Chapter and the Arizona Builders Alliance, were working to ensure that a final recovery measure includes many of the sensible provisions found in the Senate proposal and the infrastructure investments outlined in the House measure.

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