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The recession-walloped construction sector rebounded in 2012, growing faster than any other sector last month and creating almost one of every four new jobs in Washington over the year.

A boom in apartment projects in the Seattle area helped produce a jump in construction employment statewide: The sector was up by 3,100 jobs over the previous month and gained 9,500 jobs over the year, second only to manufacturing in growth, the state Employment Security Department said Wednesday.

Despite that, construction employment is still about 30 percent — more than 60,000 jobs — below its level in December 2007, the start of the Great Recession. And industry leaders fear cuts in capital budgets at the federal level or a tightening in bank lending could stall the sector’s recovery.

“We have a long way to go to get back to those 2007-2008 numbers,” said Jerry Dinndorf, Seattle district manager for the Associated General Contractors of America, which has about 600 members in Western Washington.

There’s still high unemployment for some trades, such as electricians, plumbers and painters, while ironworkers and operating engineers have low unemployment, said Lee Newgent, executive secretary of the Seattle Building & Construction Trades Council.

Unions hope jobless rates will drop further as high-rise construction projects in South Lake Union and Bellevue move forward.

“It’s too early for a ‘boom,’ but it’s definitely a whistle,” Newgent said.

Overall, Washington’s economy lost 7,900 jobs last month and gained 42,100 over the year on a seasonally adjusted basis, state officials said Wednesday.

The preliminary estimate, which is based on a survey, will likely be revised in March after more data, officials said.

In December, government shed 4,700 jobs, while the private sector eliminated 3,200, led by retailers and professional services.

Jobs at stores in the post-holiday shopping season may continue to decline.

For example, Kmart said it plans to close its Seattle store on Aurora Avenue North on March 17 and will lay off 85 employees, who will be able to apply for jobs at other Kmart and Sears stores. The store’s liquidation sale starts Thursday.

The unemployment rate, which measures how many people out of work have looked for a job in the past four weeks, fell to 7.6 percent in December from a revised 7.7 percent in November.

But the drop occurred largely because a net 6,200 jobless people stopped hunting.

State officials said December’s estimated unemployment rate was the lowest in four years, but cautioned the declining rate was largely because of the shrinking labor force.

“When the labor force shrinks, it artificially lowers the unemployment rate,” said Joe Elling, Employment Security’s chief labor economist.

In December, about 262,500 people in Washington were jobless and looking for work, state officials said. Just over half of them received unemployment benefits last month, and about 4,200 exhausted their benefits.

Analysts said the job losses in retail didn’t track with what they expected. Doug Pedersen, co-publisher of The Puget Sound Economic Forecaster, said he estimated retail sales in three types of stores — furniture and electronics, clothing and accessories, and general merchandise — was up 5.3 percent in the fourth quarter of 2012 over the year.

Pedersen said the 4,100 jobs retail lost in December is probably a statistical quirk that will be revised later.

But, it could also represent some caution on the part of employers anxious about Congress failing to compromise on fiscal policy.

“Uncertainty, which we have plenty of, is really costly for the economy,” Pedersen said.

Some workers are going to Canada to work for companies mining the tar sands.

In the last few months, the Iron Workers Local 86 has held meetings for its roughly 350 members out of work to meet representatives from Vancouver, Edmonton and Calgary.

Roger Hicks said he quit his construction job last month and makes more money at a job near Edmonton.

“You’ve got to follow the work,” Hicks said.

“It could be a year, two years, three, 10, as long as I can take it.”

Sanjay Bhatt: 206-464-3103 or On Twitter @sbhatt