The Miami Herald

Construction employment in “free fall” again in South Florida

The latest job numbers raise a grim question for South Florida’s construction industry: How much smaller can it possibly get?

It has been five years and two months since Broward’s construction industry added a job, according to federal payroll statistics. Miami-Dade last added a construction job 57 months ago, in September 2007.

Even worse, after seeming to approach a plateau in late 2011, employment losses in construction began picking up steam again this year. In June, construction easily led job losses in both Broward and Miami-Dade compared to the prior year. South Florida’s construction industry now employs about 54,000 people, compared to 117,000 people in the summer of 2007, according to the Bureau of Labor Statistics.

Shrinking industries in Broward and Miami-Dade shed 15,600 jobs since last June, and construction accounted for 44 percent of those losses. In Miami-Dade, construction accounted for 43 percent of the lost positions. The second-highest losses came in local government hiring, which made up 20 percent of the payroll decline in South Florida.

The growing losses in government jobs offer a clue as to why construction employment again has taken a dive. With local governments cutting back, maintenance and infrastructure contracts in the private sector also are under pressure. So the payroll losses in construction likely aren’t a pure reflection of the building industry, which appears to be gaining some momentum.

Permits for new single-family homes have been climbing since last summer, and are up about 30 to 40 percent from a year ago in South Florida.

Karl Kuykendall, an economist who follows Florida for IHS Global Insight, had thought 2012 would be the turning point for South Florida’s construction industry. “At one point, we were predicting a bounce back this year,’’ he said. “We’ve been surprised at how long it has taken.”

Kuykendall said the ongoing stream of foreclosed homes will cut into the building activity as banks unload more distressed real estate. Even so, he expects construction payrolls to stabilize by early 2013 in Miami-Dade.

“It shouldn’t last that much longer,’’ Kuykendall said. “Construction employment has already fallen so far, there’s not really much further it can go. We expect mild losses over the second half of the year compared to what happened in the first half.”

In the western reaches of Miami-Dade, Adrian Homes has taken up a novel endeavor: building a new subdivision. Veteran builder Pedro Adrian Sr., 78, has sold eight luxury homes on the land he bought out of foreclosure and now is working on five more.

With few banks willing to fund the development, Adrian paid almost all of the construction costs himself,’’ said Jorge Alvarez, Adrian’s construction superintendent. With little work, the sub-contractors working on the site off Southwest 147th Avenue have kept payroll costs as low as possible.

“Everyone has a skeleton crew,” Alvarez said. “Things are coming back slowly.”

Still, Adrian sees building demand for spacious new homes in the Miami suburbs. Prices start around $350,000 for the four-bedroom homes that can be customized once a contract is signed.

“A lot of people don’t want to deal with foreclosed homes because of the problems that come with them,’’ Alvarez said. “A new home comes with a builder’s warranty, and they can pick the tile and they can pick the colors.”

The Miami Herald’s Economic Time Machine tracks 60 local indicators in an effort to chart South Florida’s recovery from the Great Recession. By comparing current conditions to where they were before the downturn, the ETM attempts to measure how far back the recession set the economy. The answer so far: June 2003. Visit ETM headquarters at miamiherald.com/economic-time-machine for the latest updates.




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