News Release from AGC of America, April 7, 2017

Association Cautions that Declines in Public Sector Construction Investments May Impact Future Sector Hiring, Urges Administration and Congress to Craft and Enact New Infrastructure Funding Package

Construction employment increased by 6,000 jobs in March as a February hiring surge prompted by mild winter weather in much of the country prompted firms to hire fewer people last month, according to an analysis of new government data by the Associated General Contractors of America. Association officials said declining public-sector investments in construction and infrastructure could impact future construction hiring unless the administration and Congress enact a new funding measure.

“Construction firms continued to add jobs over the past year at a higher rate than the overall economy,” said Ken Simonson, the association's chief economist. “The small job gain in March most likely reflects ‘payback’ for unusually large hiring in February rather than a flattening of demand for projects. However, there has been a slowdown in public investment in highways and other infrastructure that could undermine construction hiring this year.”

Construction employment totaled 6,882,000 in March, an increase of 6,000 from the February total and an increase of 177,000 or 2.6 percent from a year ago. The year-over-year growth rate was almost double the 1.5 percent rise in total nonfarm payroll employment, Simonson noted. The increase followed a jump of 59,000 jobs in February—the largest one-month rise in 11 years.

Residential construction—comprising residential building and specialty trade contractors—lost 7,600 jobs in March but is up by 112,600, or 4.4 percent, compared to a year ago. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 13,300 employees in March and 63,500 employees, or 1.5 percent, over 12 months. However, employment in the portion of the industry that performs most infrastructure work—heavy and civil engineering construction—increased by only 4,100 over the month and 3,600 or 0.4 percent over the past 12 months.

Association officials noted the latest construction spending figures from February show that public-sector construction spending declined by 8 percent during the past twelve months. They cautioned that continued declines on public-sector construction activity are likely to impact future hiring trends. As a result, they urged Trump administration officials and members of Congress to work together to craft and enact a new infrastructure funding package, as the President has promised to do.

“The President appears to understand the wisdom of making new investments in our aging infrastructure, and it is essential that he demonstrate that understanding with proposals that include sustained funding,” said Stephen E. Sandherr, the association’s chief executive officer. “Finding a way to improve our nation’s crumbling infrastructure won’t just lead to more construction jobs, it will provide a needed boost to our broader economy by making most aspects of business more efficient and less costly.”