During April and May, North Carolina's construction labor force did something it had not done in seven years: It shrank two months in a row after a record high.

At the end of May, there were about 258,200 construction industry jobs in the state, down from 258,400 in April, which also was down from a record 258,900 in March, U.S. Bureau of Labor Statistics data show.

It's a tiny decline, 700 people.

But if history is any indicator, the two-month drop could foretell leaner times for builders.

It also might say more about commercial construction than the slumping housing market.

The last time the number of construction workers in the state got smaller in the two months after a record high was 2001.

The total peaked in March 2001 at 234,500 workers before spiraling down 11.2 percent -- or 26,300 jobs -- in July 2003.

Now economists are predicting a similar decline. And the language is pretty frank.

"It's abysmal in the residential side, and employment is falling on the commercial side as well," says Tony Plath, a UNC-Charlotte professor who tracks construction trends for the state association of the Associated General Contractors trade group.

Until now, the state has added construction jobs largely because of a swelling number of institutional and commercial projects. As home builders downshifted, commercial contractors gladly hired their extra hands.

But as the economy has slowed and lenders have tightened standards for developers, fewer projects are popping up.

"Commercial has stopped hiring the runoff from residential," Plath says. "Now we're pretty much in a state of decline.

"The next two months are going to get bloody," he says, "and it's not going to pick up until 2010."

Until then, it's going to be harder for the jobless to find work: Not only are there fewer jobs, there are more workers.

"We may have it bad," Plath says. "But we still have it better than places like Michigan and California and Nevada."

Workers from those harder-hit parts of the country are flowing to North Carolina, looking for work in what to them looks like a sun-kissed state.

The problem: Once they get here, they are finding fewer available jobs. "Other parts of the country haven't gotten the memo yet," Plath says.

The good news for developers: cheap labor. "We're going to see stable-to-falling wages in commercial construction in everything but the most skilled and demanding construction trades," Plath says.

"It's a buyers market. You can hire just about anybody."

The bad news for developers: "Materials prices are going through the roof," Plath says.

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Fewer builders means fewer planners and inspectors, too.

Wake County, which last year had 61 planning and inspections employees, is cutting two positions -- one planner and one inspector.

The positions had gone vacant and were unfilled, but now they have been eliminated altogether.

"As building has increased and been more active in the past few years, we've added position," says Johnna Rogers, the county's budget director. "So when it's going down, you would expect that we could take positions away."

Between January and April, there were a decade-low 2,137 new-home starts in Wake County, 35 percent below the annual average over the previous nine years.

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Not everybody is shrinking.

The Cypress of Raleigh, a continuing-care retirement community off Strickland Road, is hiring 125 people in preparation for the September opening of its 202-unit first phase.

For now, that makes it one of this year's 10 fastest-growing Wake County companies, according to a recent tally by Wake County Economic Development.