Construction employment continues to drop

Mike Loftus saw the crash coming in 2007 when he was working as a construction surveyor on CityCenter.

Residential was bottoming out, the economy was slowing and everyone around him was getting laid off. The Boulder City resident retired in December from Operating Engineers Local 12 after nearly 30 years of working construction in Nevada.

"We were coming to the end of the job (at McCarran International Airport). We still had work, but there was pension stuff going on, so I thought I'd better get out now," Loftus said. "You've got so many younger guys in the trade that never knew about layoffs. Work in Vegas is pretty steady and guys thought that's the way it is. In construction, you're always working your way out of a job."

Construction employment continues to diminish in Las Vegas as 7,800 jobs were lost in the 12-month period through January, a new report from Washington, D.C.-based Associated General Contractors found.

There are 39,000 construction workers remaining in the area, a 17 percent decrease from 46,800 in January 2010, AGC reported. Over the year, construction employment fell in 36 states, led by a 13 percent decline in Nevada.

Las Vegas ranked next-to-last among 337 metropolitan areas for which construction data was provided by the Bureau of Labor Statistics. The largest percentage loss occurred in Steubenville, Ohio-Weirton, W.Va., where construction employment fell 32 percent.

A separate report from the National Association of Home Builders showed an uptick in market conditions and developer sentiment in the fourth quarter. The Multifamily Production Index rose five points from the previous quarter and is at its highest level since 2006.

Those figures are extremely volatile and nosedived again in February, said Ken Simonson, chief economist of the contractors association.

Las Vegas isn't quite yet like Youngstown, Ohio, where they're demolishing houses, but it still has a problem filling vacant homes, Simonson said. Some analysts estimate as many as 125,000 vacant homes in Las Vegas, based on U.S. Census Bureau data.

"You're still in the pit," the AGC economist said Wednesday from Washington. "I'm seeing a few positives in warehouse and hospital construction picking up nationwide, a few announcements for manufacturing plants, but none of those categories is prominent in Las Vegas. Your core of hospitality, retail and entertainment are all in for another year of negligible activity."

State-funded construction remains grim. The Center on Budget and Policy Priorities reported that 44 states are projecting budget shortfalls for fiscal 2012.

AGC announced a national plan Tuesday detailing measures to stimulate demand for construction. Officials said the plan was needed to reverse construction employment declines that have taken place in nearly every state since January 2007.

Las Vegas has lost 61,900 construction jobs, or 61 percent of its industry work force, over the past four years, second only to Phoenix (91,400 jobs). The Inland Empire of Southern California was next (57,700), followed by Atlanta (57,700) and Los Angeles (56,200).

Perini Building, one of the larger general contractors in Las Vegas, laid off some 12,000 workers with the completion of CityCenter and The Cosmopolitan. Local contractors such as Martin-Harris Construction, Breslin Builders, R&O Construction and Penta have been reduced to bare-bones staff. Martin-Harris still has a banner hanging from a stalled time-share project near the Rio.

Larry Monkarsh, owner of LM Construction in Las Vegas, said business hit bottom for him in 2010 and hopefully is on the way back up. He's doing a lot of tenant improvement work, some medical offices and a design-build church.

The company, which once employed about 120 people, is down to six full-time office workers and two in the field, Monkarsh said.

"What's changed for us is we used to be steel-stud frame and drywall. All of those employees are gone. If I have to self-perform, I do it myself with a superintendent or we hire as needed and then lay off right away," he said. "We don't have an appetite for competitive bidding against 16 other guys. Right now for us, it's just being very careful on job selection. Every inquiry is an assessment."

Construction recovery has been stalled by excessive taxation and regulatory hurdles, Simonson said. AGC doesn't expect to have its plan adopted right away, but it should give policy-makers something to look over and think about, he said.

The plan outlines measures to help boost private-sector demand for construction, help tackle a growing infrastructure maintenance backlog and reduce needless red tape and regulations.

AGC developed the plan to overcome the years-long construction downturn that has left more than 2.2 million construction workers unemployed and the industry's unemployment rate at 21.8 percent, more than twice the national average.

"Our goal is to rebuild a devastated construction market that has left millions jobless, littered cities with incomplete projects and sapped much-needed revenue, commerce and customers out of our economy," AGC Chief Executive Officer Stephen Sandherr said Tuesday in Phoenix. "Considering the scope and impact of construction job losses, the last thing any of us can afford is a repeat of the past four years."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.