Boston Construction Jobs to Slow

Boston jobs in construction are expected to face a downward trend through 2014.

According to an article by the Massachusetts Executive Office of Labor and Workforce Development, long-term economic and demographic factors will slow job growth in Boston's construction industry through 2014, causing employment to decrease by 2.8 percent.

As of July 2008, Boston's construction industry employed a total of 103,300 people, according to the United States Department of Labor Bureau of Labor Statistics, a decrease of 2.2 percent from last year.

Overall, construction is projected to account for only 3.9 percent of Massachusetts' employment, lower than the current 4.4 percent.

"Fueled by low mortgage rates and the Big Dig construction project, construction boomed between 1994 and 2004, generating 52,500 new jobs," the article notes. "In residential construction alone employment shot up 110 percent and continued to increase even after the state entered a recession that caused total employment to decline and the labor force to shrink.

"This surge, which accounted for 18.9 percent of all jobs generated in the state over the 10 year period compared to 11 percent of U.S. job growth, took place despite below-average population growth (5.2 percent for Massachusetts vs. 12.8 percent for the U.S.)," the article adds.

By 2014, household formations are expected to slow, causing a reduction in the need for single family homes. The slow growth should cause overall employment in the construction industry to decrease from 138,400 to 134,500, a loss of 3,900 jobs.

At the same time, however, the population as a whole will be aging, increasing the need for senior housing and second homes. Household incomes also should rise, upping the demand for home improvements, renovations and remodeling.

Demand for non-residential construction, particularly nursing and health facilities, will grow faster than during the 1990s. Also, the continued growth of biotechnology will result in some school and office renovations.

"Construction is a volatile industry, sensitive to interest rates and the business cycle; employment fluctuates widely during employment booms and busts," the article adds. "In addition large scale public works projects such as the Big Dig can exert a powerful short-term influence and boost employment well above the trend line. Therefore specific point-in-time projections must be viewed cautiously."