Only 120,000 Jobs Created in March While Industrial Construction Starts Top $16.9 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Since the beginning of the recession, approximately 5.3 million jobs have been lost. Recovering these jobs has been an almost herculean task that has been slow to develop. While the jobs were shed rapidly and in large numbers, they have been coming back slowly and in much smaller quantities. It has helped that industrial construction starts have been solid almost each and every month, but at the pace that jobs have been recovering it will be 2014 before all 5.3 million jobs are back on the market. In March the jobs continued their progress to total recovery, but at a slower pace than expected. Only 120,000 new jobs were created in March, which dropped the unemployment rate slightly, but industrial construction starts had another very solid month, topping $16.9 billion in the United States.

The decrease of the unemployment rate to 8.2% marks the lowest that rate has been since January 2009. This is a good sign of continued progress, but progress in larger increments will need to occur if all of the lost jobs are to be recovered sooner than expected. Part of the reason jobs recovery has been so slow is that companies have taken a much more cautious approach to expansion and hiring since the end of the recession. The recession taught companies that they had the potential to do more with less, and that has led to a slower recovery of those jobs that had to be cut in order for companies to remain in business.

While this revelation about productivity was welcome, it has also led to other problems. The level of technical skill required to operate the new equipment that helps maintain high levels of productivity has required retraining of the workforce. In many cases there are not enough skilled laborers to meet the need. The bottom line is that many of those 5.3 million workers who lost their jobs are no longer qualified for the jobs that are available, which has slowed down jobs recovery.

In March, the manufacturing sector had another good month in terms of hiring. During the month, 37,000 new manufacturing jobs were created, mostly in the motor vehicle and parts sector, the machinery sector and the fabricated metals sector. Solid jobs growth was also seen in the professional and business services sector, which added 31,000 jobs; the education and health services sector, which added 37,000 jobs; and the leisure and hospitality sector, which added 29,000 jobs. However, the construction sector, which has struggled greatly since the recession, continued to lose jobs, dropping 7,000 jobs in March. The construction sector has maintained an extremely high unemployment rate, 17.2%, thanks to the weak housing market.

The mostly solid construction starts within the industrial industries has helped keep the job numbers in the positive zone for many months. In March, more than 630 capital and maintenance projects worth an estimated $16.9 billion began construction, which helped create a number of jobs. The Power and Industrial Manufacturing industries saw the most construction activity for the month, with the Power Industry beginning construction work on $4.9 billion in projects and the Industrial Manufacturing industry beginning work on $3.9 billion in projects. The Metals & Minerals Industry also saw some significant investment in March, with $1.7 billion in projects beginning construction activities, while the Pharmaceutical & Biotech Industry added $1.6 billion to the total.

Four regions of the country saw a significant amount of construction starts during March. The Southwest region, the Northeast region, the Rocky Mountains region and the Great Lakes region each had more than $2.3 billion in construction starts within their borders, accounting for 354 of the total projects that began construction during the month. Project activity in the Southwest region has been booming in recent months and is likely to continue to do so through the summer. The Great Lakes region has been struggling to rebuild itself after taking a major hit during the recession, especially with the automotive sector's total collapse during that time period.

The jobs and industrial construction news for March was certainly good. The unemployment rate has continually declined in the last several months, and construction starts should only continue to increase as the prime spring and summer months roll on. Hopefully, in the coming months the new jobs numbers will be more in line with the expectations of economists, which will only drive down the unemployment rate that much faster. Construction starts should continue to be solid until at least this coming fall and possibly beyond if the coming winter is as mild as the last. Given that this is an election year, the jobs situation is a hot button topic all across the country, and therefore this is the year that the U.S. can hope to make the most progress in its jobs recovery. Perhaps that momentum will launch the country into a very successful 2013 in terms of jobs gains, and the U.S. can beat the 2014 estimation of total jobs recovery.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.