U.S. Pipeline Construction Activity Declining Significantly in the First Quarter of 2020

Chicago – May 10, 2020

U.S. natural gas, oil, and liquids pipeline construction activity declined significantly in the second half of 2019 and into the first quarter of 2020 after an exceptionally strong 2018 to 1H2019. Real construction levels as measured by industry employment (i.e. non-dollar denominated) are estimated from the U.S. Bureau of Labor Statistics (BLS) Current Employment Statistics monthly reporting of non-supervisory pipeline construction employment (BLS data series CES2123712008, www.bls.gov). 

In March 2020 the BLS reported 125,300 non-supervisory pipeline construction employees nationwide, compared to 140,600 workers in March 2019 period (Figure 1). Year-to-date, 2020 U.S. pipeline construction employment is 16.1% lower than the corresponding period in 2019 and is falling sharply with the industry’s declining commodity energy prices. Despite the decline, construction activity remains at levels consistent with 2018 levels albeit with a strongly negative trend. 2020 levels are similar to 2018 levels and well above those of the 2015-2017 era of low commodity prices.

The long-term perspective of current U.S. pipeline construction activity remains strong by historic comparison. Current U.S. pipeline construction employment is still double the levels of the early 2000’s (Figure 2).  The long-term growth trend in employment that began in circa 2006 has continued unabated, with only minor, temporary setbacks occurring following the 2008 financial crisis and late-2014 oil price break.

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