The California construction industry lost thousands of jobs last month, according to new government data, bucking a trend that saw the industry outpace growth in other sectors amid a resurgent housing market.
The U.S. Bureau of Labor Statistics said Friday the construction industry shed 8,500 positions--the only sector in California to do so. Economists had been expecting the industry to add a few thousand jobs, and cautioned May's figures were only one month's data and that they will be revised.
“Construction numbers are down, but that’s not indicative of a trend based on the number of permits,” said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research.
Adibi said the number of permits issued for new construction have increased, and as a result, May’s figures will likely get revised upward.
For many in the industry, 2013 had been positive.
Dean Potts has beefed up his army.
As the housing market barreled forward this year, Norco-based Bonanza Plumbing Inc. saw its number of construction projects increase and Potts hired on roughly 15 workers this year who install the plumbing in new homes across Southern California.
“As of this moment we have 332 units under construction,” said Potts, the firm’s owner. “For all of 2012 we only had 275.”
Extremely tight housing inventory, low mortgage rates and an improving economy have helped send home prices upward and turned what was a drag on the economy for years into an economic standout.
And those higher prices and dearth of homes for sale has spurred builders into action, leading to jobs not only in construction, but also related industries such as lumber, heating, air-conditioning and more.
Potts said his firm employed only 11 employees at the end 2011—a dramatic drop-off from 200 during the boom. Now he said “my guys” number roughly 50.
One of Bonanza’s current jobs is an 18-unit town home project in Alhambra. The Olson Co. project is one of 20 communities the Seal Beach builder has in various stages of development throughout Southern California.
“Business is very, very good,” said Olson President Scott Laurie.
Across the country, builders are more confident, although they say there is a lack of qualified labor after many workers moved on to other industries or retired during the bust.
More builders saw market conditions this month as good rather than poor for the first time since 2006, according to the National Assn. of Home Builders/Wells Fargo Housing Market Index.
Developers started construction on homes in the West at nearly a 6% faster pace last month compared to April, according to the Commerce Department. The increase came entirely from multifamily construction, as single-family starts fell.
But compared to last year, both multi-unit starts and single-family starts were up.
Mary Kathawa, president of ProWall Lath and Plaster in Escondido, said the contractor has doubled its workforce to about 400 since October.
“We are working all over Southern California,” Kathawa said.
The state's unemployment rate in May fell to the lowest level since November 2008, hitting 8.6% as employers added 10,800 net jobs to their payrolls.
Times Staff Writer Ricardo Lopez contributed to this post.
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