Construction employment rose in Maine over nine months of 2020 after the coronavirus pandemic hit the state, with out-of-state demand for new homes and upgrades to existing real estate buoying a lackluster market, a national industry group said Thursday.
Maine was one of only 15 states to see the number of jobs in the sector rise between February and November, with 500 more jobs for a 1.7 percent rise that bucked a national 2.4 percent decline, according to data released by the Associated General Contractors of America and Sage Construction and Real Estate.
Most of the rise in Maine and throughout the country was in residential housing, while industrial construction saw a wave of pandemic-related cancellations or postponements. While the northeast United States as a whole saw job declines, all Maine metropolitan areas stayed flat or rose slightly.
The Bangor metropolitan area kept its 3,500 construction jobs, while Lewiston-Auburn rose by 100 to 3,100 and Portland-South Portland rose by 300 to 10,700, according to the contractors’ association.
“The rise in Maine is partly from people relocating from denser populated areas such as New York or Boston, or people who already had homes and are adding to or updating them,” Ken Simonson, chief economist with the association, said.
Rural Maine towns, including Rangeley, have seen an influx of people from out of state seeking a safe haven from the pandemic. But relatively densely populated areas such as South Portland are also magnets for people moving into the state from bigger cities.
He said commercial real estate building as a whole experienced declines in employment as projects got canceled or delayed, partly because pandemic restrictions and guidelines caused building prices to rise. However, Maine saw employment gains over the past year in building construction, heavy and civil engineering construction such as highways and specialty trade contractors who work on any type of project.
Maine construction businesses also received a bigger share of federal loans aimed at helping small businesses keep their employees and stay afloat during the pandemic than did other industries in the state. Data released by the state in mid-April showed that construction accounted for 12.8 percent of the federal Paycheck Protection Program loans in Maine while making up 5.3 percent of early jobless claims.
The association is predicting a bleak 2021 for the industry nationwide in an industry outlook report released Thursday. Construction sectors expected to be especially hard hit are K-12 education, public buildings and higher education, largely because students and workers are staying home. By contrast, construction jobs for warehouses, clinics, testing facilities and medical labs are expected to rise.
“This is clearly going to be a difficult year for the construction industry,” Stephen Sandherr, CEO of the construction association, said.
Few of the 1,300 construction firms surveyed nationwide by the association expect the industry to recover to pre-pandemic levels any time soon. More than half said it will take more than six months.
Some 64 percent of contractors said new coronavirus procedures are causing projects to take longer to complete. Only 35 percent of survey respondents nationwide said they plan to add staff this year. In the northeast, that number is lower, with less than 25 percent expecting to hire while 41 percent expect to reduce staff.
Simonson pointed to some construction trends that could benefit Maine going forward. One is demand for safer alternatives to nursing homes in the nation’s oldest state by median age. Another is remodeling office spaces and creating new co-working spaces.
“There already is a lot of tenant space being offered by employers who have downsized or closed, which weighs on new construction,” Simonson said. “So I think the only bright spot in office construction is remodeling to accommodate wider spacing of tenants and building out partitions to add people in open space.”