Jobs Gone

A quarter of Tucson's construction work has evaporated--but some experts say we may be heading for a turnaround

In the last two years, more than 7,000 construction jobs in metropolitan Tucson have disappeared--a drop of 24 percent.

According to the U.S. Department of Labor, Tucson had almost 29,000 construction workers employed at the peak of the building boom in 2006. Now that figure hovers below 22,000. Because these layoffs occur one job site at a time, as new subdivision homes are finished or a strip-mall renovation project is completed, this steady decrease in employment hasn't grabbed many headlines.

The impact, however, is very real. Construction is a major component of Tucson's economy, ranking between manufacturing and financial activities in the total number of people employed.

Factoring in the recent job losses, the total number of workers employed in construction in Tucson hasn't been this low since the post-Sept. 11 economic downturn of 2002.

Meanwhile, projections from the state of Arizona show that these numbers will continue to fall next year. The state estimates Tucson will lose another 1,300 Tucson construction jobs in 2009.

In total numbers, that's largest job loss predicted by the state for any economic sector in Tucson. While most local employment categories are expected to decrease just a little bit in the coming year, construction stands out with an anticipated 5.4 percent loss.

Marshall Vest, of the UA's Economic and Business Research Center, also believes Tucson's construction-employment numbers will continue to fall, at least for the next several months. On a more positive note, Vest sees new-home construction in Arizona, an economic bellwether hit hard over the last few years, as "stabilizing."

But Vest thinks that commercial construction in Tucson, once an alternative for craftsmen and laborers who were laid off from home-building jobs, will join in the downturn.

"Commercial construction is cutting back as current projects are finished," Vest notes. "The demand for new commercial space has essentially evaporated."

Based on this economic double-whammy of losses in both residential and commercial building, Vest believes declines in local construction jobs may number in the thousands in the near-term.

On the other hand, Vest remains somewhat optimistic about next year's overall economic situation in Arizona. "Clearly, the lion's share of this correction is now behind us," he writes in a recent newsletter.

In an interview, Vest says that he looks at trends in the number of initial unemployment claims to gauge when an economic downtown is ending. He also points out that knowledge of a recession's beginning, as well as its end, always comes long after the fact.

"You don't know you're in one until many months later," he says of these periodic downturns in the economy, "and you don't know you're out of it, in the same way."

This fact was echoed earlier this week, when the National Bureau of Economic Research at last confirmed that the United States is in a recession--and has been since December 2007.

However, Vest believes things will look better by next summer. He writes in the newsletter: "The business cycle will turn up, and by mid-2010, robust growth will return once again (to Arizona)."

Elaborating on this position in a phone conversation, Vest sticks by his economic projections, but does add some warnings.

"We're not at the bottom yet with home construction," he says, "... but the worst is behind us. We're certainly one-half (through this economic downturn)."

Local homebuilder Tom Doucette agrees with Vest about the local economic downturn being more than half over. However, he doesn't believe 2009 will look all that good for his industry.

"We'll build 3,000 or so new homes," Doucette says of metropolitan Tucson, a number that compares unfavorably to the recent record of more than 11,000 in 2005. (See "Mere Fractions," Currents, Oct. 30.) That projection of 3,000 is similar to the pace of new-home construction that Tucson saw this year.

"We have to build public confidence slowly and steadily," Doucette says of a home-building turnaround, "and shouldn't build houses people can't afford."

The viewpoints held by Vest and Doucette about the economic downturn slowly ending next year--presuming they're correct--should be good news to laid-off Tucson construction workers. They earn relatively high salaries for Tucson; in 2007, according to the U.S. Labor Department, the average salary was $41,190 for plumbers, $38,840 for electricians, and $36,200 for carpenters.