Construction will lead Connecticut’s industries in job growth over the next 10 years, economists and labor analysts say.
The industry hit hardest by the Great Recession is poised for a strong rebound this year and beyond as public projects move forward and the backlog of private projects built up during the economic downturn starts to clear, said Andrew Condon, director of the state Department of Labor office of research.
“It is coming back, but it is coming back from a very big fall,” Condon said. “You have to put that in context because construction was coming from a very low place.”
As Connecticut’s unemployment rate continues to inch downward, the economic recovery is being felt differently by various industries, a Hartford Business Journal analysis of state labor data shows.
Health and education services, for example, didn’t have an employment drop during the Great Recession and has maintained either slow growth or a leveling off its workforce. Leisure and hospitality gained back all the jobs it lost and added nearly 10,000 more. Manufacturing just started a slow uptick. Financial services still is bottoming out.
Construction hit bottom in March 2010, when its employment dropped to 48,800, a 29 percent decrease from its pre-recession high. The industry remained stagnant until 2013 when its jobs pace picked up; its employment now stands at 56,800.
“Our challenge now is people have left the industry,” said Don Shubert, president of the Connecticut Construction Industries Association. “We are trying to make sure the labor force is available.”
CCIA is working with utility companies to train employees for the $7 billion expansion of the natural gas home heating system, which will be the major private construction project over the next 10 years, Shubert said.
In February, Connecticut had the fifth fastest-growing construction industry in the country, as its workforce grew 7.2 percent in the last 12 months, according to data from the Associated General Contractors of America.
Even with that growth, construction still might not gain back all 20,000 jobs lost in the recession, Condon said. Other industries, though, still are waiting for a jolt.
Manufacturing hit bottom in November 2010 at 160,100 jobs and has remained stagnant, growing slightly to 161,900 jobs. Although hastened by the recession, manufacturing jobs in the state have been trending downward since the 1990s; the industry has lost about half its jobs since then.
The aerospace subsection of the manufacturing industry should recover nicely in the coming years as the development of new commercial and military airplane engines will lead to employment growth at parts makers, said Al Samuel, executive director of the Connecticut-based Aerospace Component Manufacturers.
Aerospace suppliers already are looking to add new staff and ramp up raw materials procurement because of what original equipment manufacturers like Pratt & Whitney and General Electric are telling them about future work needs, Samuel said.
“This is a tremendous production surge that we are expecting in the next few years,” Samuel said. “The concern our members have is how we prepare for the coming surge.”
The financial industry might be heading for a surge of its own, even though it’s jobs are still in decline. The industry peaked at 145,600 jobs in January 2007 and has dropped steadily since to 130,300 jobs.
“Those had been important, high-paying jobs in the state,” Condon said.
New York City Mayor Bill de Blasio has indicated he plans to tax more heavily companies and employees on Wall Street, which could lead those firms to move to Connecticut, said Steve Paulone, director of graduate business programs at Post University in Waterbury.
“The natural progression is that they move out of New York City, and the best place for them to go is southern Connecticut,” Paulone said.
Adding new workers to Connecticut will be important because the size of the state’s workforce has declined for the last three years, Condon said.
“The labor force shouldn’t be declining for a significant period of time, and it is,” Condon said. “A mostly declining labor force over the long-term isn’t good for economic growth.”
The number of people designated either employed or unemployed in Connecticut peaked at 1.92 million in January 2011. Every month since, the number decreased before ticking up slightly in 2014 to 1.86 million by February.
That means more people retired, moved out of state, or gave up on trying to find a job altogether than entered the Connecticut workforce, Paulone said.
A shrinking labor force impacts economic indicators like property values as people sell houses at reduced values to get better jobs out of state, Paulone said. Declining property values force local governments to increase the tax burden on the remaining property owners to keep municipal revenues level.
“The question becomes, ‘How do you stop the shrinking once it starts?’ ” Paulone said. “The problem is it takes time and training.”
As the nature of Connecticut’s economy shifts, workers cast off from shrinking industries need to learn how to work in growing sectors, Paulone. A former manufacturing worker, for example, might need to be trained in construction.
Retraining a discarded worker is not an overnight process, Paulone added, and workers will want to enter industries where they can make similar salaries to their previous ones. A manufacturing worker entering the retail industry would be considered underemployed, since the wages are significantly less.
“Job creation is critical,” Paulone said.n
