The near future of the Connecticut construction industry remains dire.
The industry managed to stabilize after reeling from 2008 to 2010, but companies will struggle for contracts and to add jobs for at least the next year or two, despite the state government launching billions in projects.
“This recession was so hard and so deep that we are struggling to find our way out of it,” said Ron Van Winkle, an economist who analyzed the short-term future of the Connecticut industry for the University of Hartford-based Construction Institute.
From 2008 to 2010, the industry shed 20,500 jobs, equal to 30 percent of the workforce, Van Winkle said. So far, this recession ranks third in the last 50 years in terms of jobs lost behind 1989-1992 (36,000 jobs lost) and 1973-1975 (22,400 jobs lost).
Although the industry appears to have hit the bottom of the recession — Connecticut construction employment is up 2 percent from last year, according to the U.S. Bureau of Labor Statistics — the recovery will not come in 2012 and probably not 2013 either, Van Winkle said.
The latest market analysis from the Glastonbury construction services firm S/L/A/M Collaborative also shows zero industry growth this year and only 4 percent growth next year.
“Concerns that the overall economy remains bleak spur higher unemployment and government gridlock,” the analysis says. “Overall confidence continues to fall, and recovery is stalled.”
Construction companies are losing confidence in the industry, as by the third quarter of this year, the Industry Confidence Index had fallen to 37 out of 100, according to the S/L/A/M report. A score of 50 out of 100 means a stable market.
The report notes unemployment in the construction sector dropped from 22.5 percent in January to 13.5 percent in August, although that is not indicative of people returning to construction work. They simply are removed from the ranks of unemployment either because they have been on them for too long or have taken jobs in another industry.
Employment in the Connecticut construction industry was at 54,300 in August, according to the Bureau of Labor Statistics.
“It appears we have hit bottom and are bouncing along,” said Van Winkle, who is also the West Hartford town manager. “We need to get projects on the street.”
Van Winkle gave his analysis at the 17th annual Construction Institute State of the State market outlook on Oct. 20 in Hartford. At the same conference, several state government officials outlined plans for more than $2 billion worth of construction projects coming in the next two years or more. That figure includes immediately realizable projects such as $600 million in school construction; intermediate projects such as the $1 billion Bioscience Connecticut overhaul of the University of Connecticut Health Center; and further down the road projects such as a high-speed rail corridor from New Haven-to-Hartford-to-Springfield.