According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 23,000 net new jobs in August, following 18,000 in July, 13,000 in June and 29,000 in May.
Press Release from Associated Builders and Contractors, Inc (ABC)
Construction Employment Retains Momentum in August, Says ABC
WASHINGTON, Sept. 7—The U.S. construction industry added 23,000 net new jobs in August, an increase from the 18,000 net new jobs added in July, according to an Associated Builders and Contractors analysis of data supplied by the U.S. Bureau of Labor Statistics. The industry has added 297,000 net new jobs since August 2017, a 4.3 percent increase. Nonresidential construction employment increased by 9,600 net jobs in August, although the heavy and civil engineering category lost 200 net jobs for the month.
The construction industry unemployment rate remained unchanged at 3.4 percent in August and remains at its lowest level in the 18-year history of the series. The national unemployment rate for all industries also remained unchanged at 3.9 percent.
“Today’s employment report confirms what many economists believe—the July jobs report was an anomaly and the U.S. economy remains stable,” said ABC Chief Economist Anirban Basu. “While the economy added an impressive 201,000 net new jobs in August, the real story is wage growth—average hourly wages are now at their highest level since June 2009. Economists and others have been warning about mounting wage pressures for quite some time, and today’s report supplies additional information indicating that such concerns are warranted.
“Given the ongoing momentum of the U.S. labor market, elevated levels of consumer and business confidence and the impacts of tax reform, construction firms can expect plentiful bidding opportunities during the months ahead,” said Basu. “Presently, there are very few indications of economic stagnation, with financial markets continuing to signal solid corporate performance during the quarters ahead.
“That said, in economics, no set of circumstances can be viewed as purely positive. Skilled labor shortages will continue to worsen, driving compensation costs higher,” said Basu. “This, along with rising materials prices, will tend to drive construction costs higher, which may eventually undermine the volume of construction starts. Moreover, borrowing costs will continue to rise as the economy expands along with wages. This will place additional pressures on developers and others who endeavor to move forward with construction projects. For now, such concerns are secondary to the current robust economic momentum.”
Press Release from Associated General Contractors of America (AGC)
Construction Employment Rises by 23,000 Jobs in August and 297,000 for the Year Even as Labor Shortages Prevent Firms from Hiring More Workers
Construction Officials Urge Federal Leaders to Double Spending on Career and Technical Education, Reform Immigration and Improve Job Training Programs to Help Address Workforce Shortages Affecting Most Firms
Construction employment increased by 23,000 jobs in August and by 297,000 jobs over the past year, reaching a 10-year high, while the industry’s unemployment rate stood at an all-time low, according to an analysis of new government data by the Associated General Contractors of America. Even as firms continued to expand, a new report finds that most firms are struggling to find enough workers to keep up with demand.
“The construction industry continues to add workers and increase pay at greater rates than the economy as a whole, with job gains spread across both residential and non-residential construction,” said Ken Simonson, the association’s chief economist. “But contractors report widespread difficulty in finding qualified workers for both salaried and hourly craft positions.”
Construction employment totaled 7,259,000 in August, the highest level since May 2008 and a gain of 4.3 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. Employment in residential construction – comprising residential building and specialty trade contractors—grew by 12,900 jobs in August and added 136,600 jobs over the past 12 months, a 5.1 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 9,600 jobs in August and increased by 160,500 during the past year, a 3.8 percent increase.
Simonson noted that three-quarters of respondents to a survey the association released last week said their firms plan to increase their headcount of both salaried and hourly workers in the next year. However, 80 percent of the firms said they are having trouble filling hourly craft positions. For all but one of the 20 categories of craft positions covered in the survey, a majority of firms that employ those workers said they are harder to find than last year, despite the fact most firms have raised pay to attract and retain workers.
Hourly earnings in the industry averaged $29.95 in August, an increase of 3.3 percent from a year earlier. Average hourly earnings in construction are now 10.3 percent higher than the average for all nonfarm private-sector jobs, which rose 2.9 percent in the past year, to $27.16. Meanwhile, the unemployment rate for workers with construction experience in August was 3.4 percent, matching the all-time low set in July and more than a percentage point lower than the August 2017 rate of 4.7 percent.
In addition to releasing the new workforce shortage survey results, the association also released a new Workforce Development Plan. That plan calls on federal officials to double funding for career and technical education programs over the next five years, reform immigration and improve federal workforce training programs. The plan also outlines steps the association is taking to recruit more people into the industry.
“There is little doubt that construction firms would have added even more new workers if the pool of available, qualified workers was larger,” Stephen E. Sandherr, the association’s chief executive officer, said. “By making a few common-sense changes to our current education and workforce training approach, federal officials can help place significantly more people into high-paying construction careers.”
