Review and Forecast: California Contractors Face Mixed Prospects In 2024
C
ontractors in California can expect an increase in federal largesse for a variety of infrastructure projects
in 2024. But those funds may not be enough to offset the headwinds from a continuing exodus of households and businesses. Following a devastating loss of 170,000
construction jobs (seasonally adjusted) in just two months between February and April 2020 at the outset of the pandemic, the industry recovered to its pre-pan- demic employment level in February 2022, not long after the nation reached that mark. (Seasonal adjustment is a statistical process to remove fluctuations due to regularly recurring holiday- or weather-related changes.)
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CALIFORNIA CONSTRUCTOR JANUARY/FEBRUARY 2024
BY KEN SIMONSON
AGC OF AMERICA CHIEF ECONOMIST
However, the state has lagged since
then. By October 2023, California’s con- struction employment was 2.9% higher than in February 2020, barely half the 5.6% gain nationwide. Te gap continues to widen: in the 12 months since October 2022, employment increased 2.3% in California, compared to 2.8% nationally. (See chart.)
Employment Varies Statewide Te situation varies greatly around the state, however. From October 2022 to October 2023, two metro areas account- ed for two-thirds of the state’s 22,400 additional construction employees. Te Riverside-San Bernardino-Ontario metro area added 7,500 employees, while the
Oakland-Hayward-Berkeley division of the San Francisco-Oakland metro area added 7,000. Meanwhile, the San Fran- cisco-Redwood City-South San Francisco division lost 1,100 employees, bringing its four-year decrease to 5,900 or 15% of its October 2019 (pre-pandemic) total. Te sluggish overall growth is due in
part to the state’s first-ever population decline, which began in 2020 but has continued since then. California lost the largest number and percentage of residents of any state between July 1, 2020 and July 1, 2021 — a loss of 358,000 people or nearly 1%. Te loss slowed by two-thirds the following year, to 113,000 or 0.3%. But there is little indication that the state has returned to its former status
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