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Construction job losses lead way as Florida unemployment soars

As Florida's unemployment soared to 9.4 percent in February — and crept into double digits in the bay area — a familiar culprit lurked behind the data.

Construction jobs, or lack thereof.

Construction accounted for 40 percent of the nearly 50,000 jobs lost statewide from January to February, according to seasonally adjusted figures released Friday. Florida's construction work force has been retreating for nearly three years. In the past year alone, the industry has shed 115,000 jobs, shrinking by 21 percent.

It's no secret that the housing bust paved the way into the recession. Now there's mounting evidence it's keeping the state from climbing out of its economic doldrums.

Blame two fronts. First, we're still waiting for a housing recovery, and second, the credit crunch means builders of office parks and shopping centers can't get financing. They are idle and laying off workers.

"Nonresidential construction had been relatively strong up until the end of last year," when credit for new projects dried up, said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.

"Now we're in the middle of financial panic, and you don't just unpanic. It takes time before confidence is restored."

Many of the states at the epicenter of the recession were epicenters of the housing boom. California's unemployment rate just reached 10.5 percent; Nevada is at 10.1 percent. That goes a long way in explaining why Florida's unemployment rate, now hovering near a 33-year high, far outpaces the national average of 8.1 percent.

It also explains why Cape Coral/Fort Myers (12 percent) is witnessing among the highest unemployment rates among Florida metro areas. In the past couple of years, Cape Coral has transformed from one of hottest housing markets in the country to the second-worst foreclosure rate behind Las Vegas, with one out of every 65 units in the foreclosure process last month.

Nearly three years into the housing slump, new home construction in Florida is still off by double digits year over year. Foreclosures are partly to blame. Why order a new home from a builder when a foreclosure is available more cheaply down the street?

"There's very little incentive for builders to put new products on the market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. "We think construction will continue to decline, probably through 2010, because there's so much product out there."

Rising layoffs are feeding the problem. Higher unemployment translates into less demand for offices, which puts even more contractors out of work.

While plenty of office building construction is on hold, the recession has also eaten into the renovations business. When tenants change offices, floor plans usually get a thorough makeover. That's not happening much lately, said Tom Kennedy, a real estate broker with Grubb & Ellis Commercial Florida.

"Businesses have been very quick to lay off people and conserve their resources," Kennedy said.

Real estate industry veterans have come to the aid of their laid-off colleagues, most prominently with Real Estate Lives, organized by Tampa real estate attorney Ron Weaver.

Weaver's group is working with 168 unemployed people so far. This week it alerted clients to openings for a civil engineer, a construction project manager and title company workers.

"We've gotten over 100 major job leads and have placed 24 people," Weaver said.

Though it's leading the pack, construction has plenty of company in the job loss category. Year over year, professional and business services lost about 100,000 jobs in Florida, while the category of trade, transportation and utilities contracted by 86,500 jobs.

The job count in the state's most resilient industry, health care, slipped slightly month-to-month but is still up 2 percent from a year ago.

Some economists have projected that the national unemployment rate will climb toward 10 percent this year, with hard-hit states like Florida and California continuing to outpace the rest of the country.

"There's no real definition of a depression, but some would say whenever you have double-digit unemployment for an extended period of time, it qualifies," said Brown of Raymond James Financial. "So we're getting closer to that in Florida."

Rebecca Rust, chief economist with the Florida Agency for Workforce Innovation, which oversees the unemployment program, dismissed talk of depression. She said the term should only be used for comparisons on a national level.

Nevertheless, Rust deemed the current recession the worst since 1974-75 and said Florida's economy is expected to worsen throughout the year.

In past recessions, unemployment has been a lagging indicator, continuing to rise even after the economy started rebounding. The latest state analysis used for budgeting purposes predicted Florida's unemployment would peak at 10.2 percent in the first quarter of 2010.

Florida's jump in February, which represents 874,000 jobless out of a labor force of 9.25 million, is up significantly from January's revised rate of 8.8 percent. A year ago, Florida's unemployment was 4.3 percent. Not included in the breakdown are discouraged jobless who are no longer actively seeking work.

The Tampa Bay area's unemployment rate hit 10.2 percent, with Hernando County suffering the most at 12.7 percent. The bay area has shed more than 51,000 jobs over the year, third-highest among Florida metro areas.

Times staff writer James Thorner contributed to this report. Jeff Harrington can be reached at or (727) 893-8242.

By the numbers


Number of construction jobs lost in Florida over the past year

21 Percentage decrease

in the industry's jobs

1 in 5 Construction

workers out of jobs

fast facts

County by county

How the jobless rate in the Tampa Bay area has increased since January.

Pasco 11.3% 10.8%
Pinellas 10.0% 9.6%

Note: January figures are adjusted from previous reports.

Source: Florida Agency for Workforce Innovation

Help on the Web

The state is urging Florida employers to post job openings and for job seekers to post their resumes at For information about filing an unemployment claim, attending a job fair or finding a state-run career center near you, go to

Construction job losses lead way as Florida unemployment soars 03/27/09 [Last modified: Friday, March 27, 2009 9:59pm]
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