Houston lost 12% of its construction jobs

Energy bust and pandemic blamed for dampening commercial building

The Houston area has lost more construction jobs over the past year than any other market in the nation, according to federal data.

The losses illustrate how severely Houston’s energy bust has overlaid the nation’s pandemic trends. While the pandemic has boosted residential construction and renovations, especially in relatively lowcost markets such as Texas, both COVID-19 and the energy bust have dampened commercial construction.

The Houston area lost 24,400 construction jobs in the year ended Sept. 30, a 12 percent decline. During the same period, the Dallas region added 5,100 jobs, a 3 percent increase and the greatest rise nationwide.

Ken Simonson, chief economist of the Associated General Contractors of America, attributed Dallas’ growth in construction jobs — a bright spot in a local economy that shed 4 percent of its jobs during the period — to a boom in homebuilding and home remodeling during the pandemic.

But in Houston, the energy downturn has overshadowed the sector’s employment gains created by record home sales and increased demand for remodels. “Houston, while it has a very diversified economy now, it’s much more tied to oil and gas than almost any other metro area,” Simonson said. “There’s been a dropoff in employment in related industries, such as the financial and the oil and gas services that are concentrated in Houston.”

As a result, demand for new offices and facilities has dropped.

While projects that began before the pandemic are still underway, new work has dwindled drastically. Architects, who are

the first to be affectedwhen projects stop coming down the pipeline, “are seeing a cliff,” said Rusty Bienvenue, executive director of the Houston chapter of the American Institute of Architects. “This brought most things to a stop unless they were already in production,” he said.

While architects specializing in home remodels and bondfunded projects such as schools are still seeing work, “everything else has been hit by this double whammy,” Bienvenue explained. Even medical design companies have had layoffs because hospital systems have had revenues hit hard by the decline in elective procedures.

When the Associated General Contractors of America surveyed its members, which work in commercial construction, three quarters reported having a scheduled project postponed or canceled this October, up from 60 percent in August and 32 percent in June. Roughly a third of members said they had already furloughed or terminated employees because of the coronavirus.

Most members, 78 percent, said they believed Congress could take steps to help construction employment by investing in infrastructure.

Simonson said the outcome of the presidential election alone will not determine the likelihood of a federal lifeline to the construction industry — Congress would also have to be aligned with the president’s goals.