Chart of the Day: The Nationwide Doubling of Unemployment
Unemployment doubled in almost very sector in the last recession, according to this graph from Paul Krugman (hat tip: Andrew Sullivan). Krugman wants to make the argument that the bad economy hit every sector with the same brutality.
I'm not so sure.
That graph doesn't make it look like construction fared much worse than the rest of the economy, but there are good reasons to think the construction industry faces a distinct and even (yes...) structural crisis, meaning that we shouldn't expect the industry to fully rebound even with full demand. This should be intuitive. Housing was a bubble that popped because it was unsustainable; therefore, industries directly related to that unsustainable bubble face something like a recession squared. Overconstruction in the 2000s will result in less demand for construction in the early years of this decade, no matter how demand recovers.
Dan Indiviglio makes the point more clearly. Of the eight private sectors considered by the Bureau of Labor Statistics, only three are still losing jobs: construction, information, and financial services. But whereas financial services and information have maintained their share of the private sector workforce, construction's share has declined by a sixth. In other words, within the recession, construction has faced an acute and lasting punishment.