According to data released today by the US Bureau of Labor Statistics, the national construction industry added 16,000 net new jobs in March.
Key Takeaways
- On a year-over-year basis, industry employment is up 246,000 jobs, representing a 3.4% increase.
- The construction industry unemployment rate fell to 5.2%, down a full percentage point from February.
- "The expectation is that construction employment will continue to expand into the summer given normal seasonal factors and the level of backlog as measured by ABC’s Construction Backlog Indicator."
- "Today’s readings suggest that February employment data represented an aberration and that the economic and employment expansion remains in place."
Press Release from Associated Builders and Contractors, Inc (ABC)
Construction Sees Minor Job Growth in March, Says ABC
WASHINGTON, April 5—The construction industry added 16,000 net new jobs in March, according to an Associated Builders and Contractors analysis of data from the Bureau of Labor Statistics today. On a year-over-year basis, industry employment is up 246,000 jobs, representing a 3.4% increase. Nonresidential employment added 3,200 net new jobs last month, with the bulk of growth among nonresidential specialty contractors, which added 5,500 net new jobs. Heavy and civil engineering added 600 jobs, while the nonresidential building category lost 2,900 positions.
The construction industry unemployment rate fell to 5.2%, down a full percentage point from the previous month. Compared to the same time last year, unemployment is down by 2.2 percentage points, and national unemployment remained unchanged at 3.8%.
“Today’s construction employment number was important for two reasons,” said ABC Chief Economist Anirban Basu. “First, the solid gains in several nonresidential construction segments, including among nonresidential specialty contractors, indicates that the level of construction activity remains robust as we approach spring. The expectation is that construction employment will continue to expand into the summer given normal seasonal factors and the level of backlog as measured by ABC’s Construction Backlog Indicator.
“The second source of importance relates to February’s weak job numbers,” said Basu. “While economists were quick to suggest that February’s construction job losses were largely attributable to weather, there were some doubts given other weak readings regarding retail sales and other economic indicators since December. Today’s readings suggest that February employment data represented an aberration and that the economic and employment expansion remains in place.
“The data also showed that public construction spending growth has replaced private construction spending growth as the industry’s driver,” said Basu. “For years, public investment languished while private sector construction spending surged in the context of a recovering economy, plentiful liquidity and low costs of capital. However, steady improvement of state and local government finances in certain parts of the nation has created more financial capacity to move forward with infrastructure projects. In particular, recently released spending data indicate significant growth in highway and street projects, which is consistent with the ongoing creation of net new jobs in the heavy and civil engineering category. Meanwhile, employment in the nonresidential building category dipped by nearly 3,000 jobs in March.”
Press Release from Associated General Contractors of America (AGC)
Hiring Rebounds from Losses in February, Suggesting Demand for Construction Remains Strong; Association Calls for Career Training Funding and Immigration Reform to Continue Growth
Construction employment increased by 16,000 jobs in March and by 246,000 jobs, or 3.4 percent, over the past year, according to an analysis of new government data today by the Associated General Contractors of America. Association officials called on federal officials to double funding for career and technical training programs and facilitate immigration for workers with construction skills before a worker shortage stalls future infrastructure projects.
“Construction employment rebounded in March, indicating that the dip in February was probably related to extreme weather conditions and not the beginning of a slump,” said Ken Simonson, the association’s chief economist. “In fact, the construction industry has added jobs at twice the rate of the overall economy in the past year.”
Construction employment totaled 7,447,000 in March, an increase of 246,000, or 3.4 percent, since March 2018. The growth rate was double the 1.7 percent gain in total nonfarm payroll employment, the economist noted. Average hourly earnings in construction – a measure of all wages and salaries – increased 3.3 percent over the year to $30.45. That figure was nearly 10 percent higher than the private-sector average of $27.70.
"The average workweek in construction is at a record high for March and the number of unemployed jobseekers with construction experience is at all-time lows,” Simonson added. “These data suggest that contractors are having a hard time finding qualified workers even though the industry pays better than the private sector as a whole.”
All construction industry employees averaged 39.9 hours of work per week in March, the highest March rate in the 14-year history of the series, Simonson observed. Meanwhile, the number of unemployed jobseekers whose last job was in construction totaled 490,000 in March, a steep decline from the 696,000 such workers in March 2018 and the lowest March total since the series began in 2000. The unemployment rate for those jobseekers amounted to just 5.2 percent, down sharply from the 7.4 percent rate a year earlier. The economist said the lack of experienced workers to hire results in longer-than-usual hours for short-handed construction crews.
In a survey the association released in January, more contractors reported they expect the dollar volume of projects available to bid on to expand than to shrink in 2019 in each of 13 project categories. In addition, 79 percent of respondents reported that they expect to add employees in 2019. However, nearly as many—78 percent—reported they were having trouble filling some positions and 68 percent said they expected that hiring would remain difficult or become harder.
Association officials said that growth in the construction industry was dependent on finding qualified construction workers and that a lack of skilled workers would hold back businesses and infrastructure projects. They called on federal officials to double investments in career and technical education programs to expose more high school students to construction opportunities and to allow a contractor to bring in foreign workers for specific projects when the firm can demonstrate it was unable to hire U.S. workers.
“Our member firms continue to worry about finding enough workers to fulfill the demand for construction.” said Stephen E. Sandherr, the association’s chief executive officer. “The only way to ensure that the construction industry continues to grow is to develop more skilled domestic workers that contractors need and to allow construction firms to seek qualified workers from outside the United States.”
