Builders have canceled 36 residential projects along the Front Range since January, contributing to the decline in the state’s construction employment.
Construction jobs in May dropped 1.5 percent compared with May last year to 165,100 workers, according to the most recent numbers available from the state Department of Labor and Employment.
The construction industry in Colorado added 3,200 workers in May, the smallest increase during that month in nearly a decade. The fall-off in construction jobs helped push the state’s May unemployment number up to 4.9 percent from 4.4 percent in April.
Denver-based New Town Builders stopped construction of Newbridge at Tollgate Crossing in Aurora because of intense competition from resale properties, foreclosures and other builders, said Gene Myers, the company’s president and chief executive.
The company employs 21 workers, down about 40 percent from last year, he said.
New-home sales in metro Denver are down 46 percent this year, according to Hanley Wood Market Intelligence, a Washington-based firm that tracks the homebuilding industry.
“Builders simply are not selling enough homes to work through their lot inventory, so opening new projects is not warranted unless a tremendous location or niche market will be served,” said Cory Hunsader, a Denver regional manager of the company.
Village Homes in Colorado has cut its workforce in half from its peak several years ago, said Matthew Osborn, senior vice president of homebuilding. The company has not canceled projects but has put new opportunities on hold.
“For us, it’s been more new communities that we were evaluating for potential land purchases that we’ve put on hold or terminated,” Osborn said.
Builders and economists say tight credit markets are thwarting the industry’s recovery.
“The requirements to produce either financing for a large project or a mortgage for a normal dwelling seem to be tightening,” said Joe Winter, economist for the Labor Department.
Nationally, construction employment fell 5.1 percent in May as homebuilding slowed, the Associated General Contractors of America said.
Construction accounted for 7 percent of Colorado’s nonfarm employment of 2.3 million, a decrease of 2.5 percent from last year, the AGC said. The industry contributed $12 billion to the state’s gross domestic product of $236 billion in 2007.
A slow housing market has a ripple effect on other construction, said Ken Simonson, chief economist for the AGC.
“If you’re not getting the new housing, you’re not getting the gas ‘n’ go, the homebuilding supply store, furnishing and electronics stores,” he said.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
