Despite a slight drop in the nation’s unemployment rate, the construction industry ended 2010 with a jobless rate of 20.7 percent, according to the January 7 report by the U.S. Labor Department. The construction industry lost 16,000 jobs last month and 93,000 jobs, or 1.6 percent, compared to December 2009. While the unemployment rate was up from 18.8 percent last November, it is down from 22.7 percent in December 2009. The average annual unemployment rate for the construction industry in 2010 was 20.6 percent. That compared to 19.0 percent in 2009 and 10.6 percent in 2008.

The nonresidential building construction sector lost 400 jobs in December, but was up by 5,700 jobs, or 0.8 percent, from the same time one year ago – the first year-over-year growth since August 2008. Employment in that sector was 688,300 in December on a seasonally adjusted basis.

Employment in heavy and civil engineering construction decreased for the second straight month, down 12,700 in December. However, employment in that sector was up by 18,100 jobs, or 2.3 percent, from December 2009. Specialty trade contractors gained 3,300 jobs last month, but the segment is down 79,000 jobs, or 2.2 percent, from the same time last year.

The residential building construction sector shed 5,900 jobs for the month and 37,000, or 6.2 percent, for the year.

The nation gained 103,000 jobs in all industries in December with the bulk of job growth in leisure and hospitality, up 47,000 jobs; education and health services, up 44,000 jobs; and trade, transportation, and utilities, up 31,000 jobs. Year-over-year, the nation has gained 1,124,000 jobs, or 0.9 percent. The nation’s unemployment rate dropped to 9.4 percent in December from 9.8 percent the previous month.

“The nation’s construction industry should be glad to see 2010 in the rearview mirror, as the sector ended the year on a dismal note,” said Associated Builders and Contractors Chief Economist Anirban Basu. “It is noteworthy that heavy and civil engineering has lost jobs for two consecutive months, which may be a reflection of the steadily slowing impact of federal stimulus spending. For much of the past year, that segment had been adding jobs.

“The expectation is that the nation will continue to add jobs. However, the construction sector is poised to underperform in the year ahead due to a number of factors, including dwindling direct impact from stimulus spending and the ongoing malaise in commercial real estate,” said Basu.

“With a national unemployment rate now at 9.4 percent – the lowest rate since May 2009 – this is an indication that the labor market is improving reasonably quickly,” Basu said. “However, this does not seem to be the case with the construction industry as today’s numbers may be a reflection of numerous factors in the economy including still subdued confidence among business owners and decision-makers.”