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Industry Jobs Slow to Improve

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by Paige Townley

Unemployment numbers have improved in Alabama, but the construction industry’s numbers are trailing behind.

Recent studies have revealed that unemployment numbers in Alabama have decreased. The state’s current unemployment rate is approximately 6.5 percent, which is down from more than 10 percent in 2010. It’s also below the average national unemployment rate of 7 percent. While this is certainly good news for the state’s economy, the construction industry’s employment numbers, however, are not quite as positive as some other areas of the economy. “In construction, we haven’t seen the growth that we’ve seen in other sectors, such as manufacturing, leisure and hospitality and professional services,” said Alabama Department of Labor Commissioner Tom Surtees.

Surtees attributes the better growth in manufacturing to the automobile industry’s increased output. “I saw a few days ago that our output of automobiles in the state was the highest it has ever been,” he said. “If we’re making more cars, that means more people are going to be hired at the assembly plants and more people are going to be hired at the suppliers, so right now the automotive group and others in manufacturing are doing better for that reason.”

Specifically in construction, research shows that Alabama is at 70 percent of where it was in 2008 for construction jobs. Compared to 2007, the state is at 67 percent. According to the Bureau of Labor Statistics, in November 2013, Alabama had 76,600 construction jobs, which is down from the same month in 2012 when it had 78,400 and the 2007 number of approximately 114,000. Numbers provided by the Bureau of Labor Statistics also show that Alabama ranks 48th—just ahead of Indiana, D.C. and Montana—when it comes to state construction employment based on the last year’s loss of jobs.

Construction in all surrounding states have bounced back just a little better than Alabama too. Florida is now at 73 percent of where it was in 2008. Georgia is back at 75 percent of its 2008 number. Tennessee is now at 82 percent of its 2008 construction job number. Fairing the best is Mississippi—the state is at 93 percent of where it was in 2008 for construction jobs and at 96 percent of where it was in 2007. “Alabama’s numbers didn’t go down quite as much as these states, so on growth we didn’t have as far back to come, which is something to keep in mind,” Surtees said. “But regardless, we know we need to get these jobs back on construction projects in Alabama.”

ABC of Alabama is certainly concerned about the industry’s slow economic rebound. Key members of the association’s executive committee—Tim Hightower, David Pugh, Randall Curtis, Robin Savage, Jeff Rode, Allen Harris and staff members Jay Reed and Todd Walker—recently held a conference call with the Alabama Department of Labor to discuss ways to initiate more job growth. Commissioner Surtees and other economic development professionals joined then on the call as well.

During the call, ABC of Alabama President Jay Reed expressed to the Department of Labor the importance of the construction industry to the state, as studies have proven the industry has a $10 billion impact on the state economy. “Initiating this call and taking a look at our numbers and different ways the state can assist the industry will help us remain an economic engine in the state and increase that $10 billion,” Reed said. “In essence, by the state taking a hard look at ways to help construction, that will certainly help the state financially.”

While the bond issue is still a work in progress for the current legislative session, it was clear that ABC’s leadership feels that passing a bond issue could not only improve construction numbers but also would amount to tremendous savings for the state. “The documentation is readily available that shows Alabama’s schools are in desperate need of renovations and the lack of performing those renovations is costing the state hundreds of thousands of dollars yearly,” Reed said. “Our association simply looked at a best practice recently performed by the Birmingham School System. After implementing basic energy efficiency construction measures, that school system alone will save millions. Interestingly enough, we currently have major universities in the state, the two year college system, as well as our association finalizing white papers for presentation to elected officials—most importantly the governors office.” ABC Chairman of the Board Tim Hightower added, “This is not a smoke and mirrors kind of legislative measure. This bond issue is thoroughly thought out and documented to show a savings to the state’s bottom line. When we create jobs and save the state budget money that is government and private sector working together at its best. That is our goal here for our bond issue.”

It is ABC’s hope that the white paper documentation will come together soon enough for the legislature to embrace this concept for 2014. Should that not occur, key elected officials have already expressed interest in reengaging these discussions in early 2015 to embrace this as a priority for the next legislative session. ABC of Alabama is encouraging vendors and suppliers who have any pertinent information on how their products can prove to be energy efficient and save money to contact the association for inclusion in the white paper. “Anyone who has proof that their products can save money when added to a construction project needs to get with us because the more we can prove these products exist, the better for the bond issue,” Reed stressed.

Other issues ABC members discussed during the call include economic incentive packages and technology upgrades for contractors. “A great deal of time was spent on ABC members sharing with the Department of Labor economic incentive ideas to recruit new businesses to Alabama,” Reed said. “The association shared some scenarios from other states that have proven to be incentive packages that won major suppliers, which equals construction work.”

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