Warm weather, shrinking labor market lower unemployment

For Ivan Sachs, owner of Connecticut-based Cherry Hill Construction Co., this year’s relatively warm winter has helped jump start his 55-year-old, family-run construction and demolition business for the 2012 season.

“There was no real, lasting frost this year, so we were able to start post-winter work a bit early,” Sachs said. “Normally we start at the end of March or the first week of April, but this year we began almost a month earlier.”

Sachs said his company provides an array of construction services from demolition to site development, and with the warm weather permitting an early start to business, they have already employed approximately 50 people this year. Cherry Hill’s situation is not unique in the state. According to Alissa DeJonge GRD ’00, director of research at the Connecticut Economic Resource Center, the mild winter has allowed construction projects across the state to move forward earlier this year than usual. This trend is reflected in recent job growth across the state. January brought an increase of about 7,000 jobs, and the Connecticut Department of Labor announced on March 29 that approximately 5,500 additional private sector jobs were added in the month of February. In New Haven, unemployment fell from 12.5 percent in January to 11.7 percent in February.

“This is good news — for the seventh consecutive month, we’re seeing positive signs in the state’s economic recovery. The state is seeing a trend that we will fight to continue,” Gov. Dannel Malloy said in a March 29 press release. “Reclaiming the jobs that were lost will take time, but my administration is committed to do everything we can to put the state on a path that will lead to an economic revival.”

Still, DeJonge noted that construction is a cyclical component in Connecticut’s economy, and the recent statistics suggesting growth in construction may not fully represent the sector. While mild weather and a slight pickup in demand for smaller projects may have created some jobs, large-scale construction work has not recovered as well since the recession, said Don Shubert, president of the Connecticut Construction Industries Association — the lobbying and informational organization representing the construction sector in the state.

“There is still a tremendous amount of large, civil construction capacity that we aren’t using. Real heavy work like highway construction won’t start until later,” Shubert said. “What you are probably seeing is some kind of institutional construction, like private universities or hospitals, or smaller contracting work.”

Shubert added that although the weather could allow for an increase in smaller projects such as business and retail space renovations, double-digit unemployment still exists throughout the construction industry as a whole.

The Department of Labor reported that unemployment in Connecticut dropped to 7.8 percent in February, down from 8.0 percent the month before and 9.3 percent in January of 2011. Nationally, February unemployment held steady at 8.3 percent, according to the U.S. Bureau of Labor Statistics.

Aside from construction, the trade, transportation and utilities sector, as well as education and health services, all experienced “significant” job growth, according to the DOL. The sectors each grew by approximately 2,200 jobs in February. Government employment shrank by 600 jobs in February, a drop of 0.3 percent, constituting the largest single-sector job loss in the state last month.

But the consecutive declines in unemployment are not fully attributable to job growth — the DOL reported that an increasing number of state residents has left the labor market. Connecticut’s seasonally adjusted labor force — which includes both employed state residents and unemployed residents seeking jobs — measured 1,914,300 people in February, down 1,700 from January and 7,500 over the past year. Connecticut’s labor force peaked a year ago in February of 2011, with an all-time high of 1,921,800 people.

“Unemployment continues to decline, although the strength of the move is diminished somewhat by the second consecutive monthly decline in our labor force,” said Andy Condon, director of the Office of Research at the Connecticut Department of Labor.

New Haven also experienced decreasing unemployment for the month of February — falling from 12.5 percent in January to 11.7 percent in February — though the figure still remains significantly higher than the state average.

“While this is a very positive trend, unemployment in New Haven remains unacceptably high,” said City Hall spokeswoman Elizabeth Benton. “We need to remain focused on growing jobs and providing meaningful connections between New Haven residents and employment opportunities.”

Benton added that New Haven must increase job training opportunities and push for school reform so that students are able to succeed in college.

“There is no better job creation program, wealth creator or violence-reduction initiative than the success of our public schools,” Benton said.

According to the DOL, Connecticut has recovered 39,100, or 33 percent, of the 117,500 total nonfarm jobs lost in the recession between March 2008 and February 2010.

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