According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 13,000 net new jobs in June, following 29,000 net new jobs in May (revised from 25,000), and 21,000 in April.
Press Release from Associated Builders and Contractors, Inc (ABC)
Construction Employment Retains Momentum in June, Says ABC; Unemployment Rate Increases as Labor Force Grows
WASHINGTON, July 6—The U.S. construction industry added 13,000 net new jobs in June after adding 29,000 net new jobs in May (revised upward from 25,000+), according to an analysis by the Associated Builders and Contractors of data from the U.S. Bureau of Labor Statistics. The industry has added 282,000 net new jobs during the past calendar year, a 4.1 percent increase.
Nonresidential construction employment increased by 8,600 net jobs for the month. The majority of that growth came from the heavy and civil engineering subsector, which added 6,100 net jobs. The nonresidential building subsector lost 200 net jobs in June after losing 5,000 net jobs in May.
The construction industry unemployment rate increased to 4.7 percent in June, 0.3 percentage points higher on a monthly basis and 0.2 percentage points higher on a yearly basis. The national unemployment rate for all industries increased to 4 percent largely due to an expanding labor force.
“Today’s employment report represents a source of encouragement for most contractors,” said ABC Chief Economist Anirban Basu. “There is evidence of ongoing hiring in both public and private construction categories. Perhaps most encouraging was the 6,100 net new jobs added in the heavy and civil engineering component, an indication of stepped-up infrastructure spending. This comes as little surprise since the ongoing economic expansion has helped to strengthen the balance sheets of state and local governments, positioning them to spend more aggressively on capital projects.
“Most private construction segments were also associated with net job creations in June,” said Basu. “While the construction spending data indicates some loss of momentum in certain private construction segments, the employment data do not seem to indicate any meaningful turbulence. During the past year, nonresidential specialty trade contractors, many of which are engaged in private construction projects, have expanded their collective payrolls by more than 100,000 positions, or by 4.3 percent. Many contractors continue to say that their backlogs remain robust and that their leading challenge is securing enough trained workers to deliver forthcoming construction services.
“The overall economy continues to produce jobs at a pace that exceeds consensus expectations,” said Basu. “Despite all the focus on rising interest rates, mounting inflationary pressures, tariffs and trade wars, the U.S. economy continues to deliver new opportunities for businesses and job seekers alike. In short, economic momentum persists. This strongly suggests that contractors will remain busy, and that additional opportunities to bid for work are in the cards.”
Press Release from Associated General Contractors of America (AGC)
Construction Employment Reaches 10-Year High as Industry Adds 13,000 Jobs in June and 282,000 for the Year; Hourly Earnings Top Private Sector by 10.1 Percent
Construction Officials Say Tax & Regulatory Reform and Recent Increases in Infrastructure Investments are Helping Boost Employment, But Warn that Trade Fights and Labor Shortages Threaten Future Growth
Construction employment increased by 13,000 jobs in June and by 282,000 jobs over the past year, reaching a 10-year high, according to an analysis of new government data by the Associated General Contractors of America. Association officials said many construction firms appear to be more willing to hire amid lower tax rates and a more favorable business environment, but caution that trade fights and labor shortages pose risks to future growth.
“The construction industry continues to add workers faster than the economy as a whole, and the industry is paying premium wages to attract and retain those workers,” said Ken Simonson, the association’s chief economist. “The employment gains are occurring in both residential and nonresidential construction. However, the industry is having to rely more and more on workers without construction experience, as the pool of unemployed construction workers has nearly evaporated.”
Construction employment totaled 7,222,000 in June, the highest level since May 2008 and a gain of 4.1 percent over the past 12 months. The economist pointed out that the year-over-year growth rate in industry jobs was more than double the 1.6 percent rise in total nonfarm payroll employment.
Hourly earnings in the industry averaged $29.71 in June, an increase of 2.9 percent from a year earlier. That put average hourly earnings in construction 10.1 percent higher than the average for all nonfarm private-sector jobs, which rose 2.7 percent in the past year, to $26.98, Simonson added.
The unemployment for workers with construction experience in June was 4.7 percent, virtually unchanged from the levels in June 2017 (4.5 percent) and June 2016 (4.6 percent)—a sign that the industry is operating at essentially full employment, Simonson said.
Employment in residential construction – comprising residential building and specialty trade contractors—grew by 4,400 jobs in June and by 133,800 jobs over the past 12 months, a 5.0 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 8,600 jobs in June and by 147,900 during the past year, a 3.5 percent increase.
Association officials observed that construction employers appear more eager to hire amid lower taxes and increased efforts to reduce needless or ineffective regulatory burdens. They added that recent increased infrastructure investments at the federal and state level are also helping boost construction employment. But they cautioned that workforce shortages, tariffs and a looming trade war could undermine future construction employment gains.
“The steps Congress and the Trump administration have taken to create a more positive business environment and boost employment appear to be working,” Stephen E. Sandherr, the association’s chief executive officer, said. “But new trade disputes and chronic underfunding of career and technical education programs pose a real threat to continued employment gains in the sector.”
