Construction Adds 5,000 Jobs in November

According to data released last week by the US Bureau of Labor Statistics, the national construction industry added 5,000 net new jobs in November. During the past 12 months, the industry has added 282,000 net new construction jobs, which translates into a 4 percent increase in total industry-wide employment.

Press Release from Associated Builders and Contractors, Inc (ABC)

Nonresidential Construction Employment Slows Down in November, Says ABC

WASHINGTON, Dec. 7—Construction employment expanded by 5,000 net new jobs in November, according to an analysis of U.S. Bureau of Labor Statistics data conducted by Associated Builders and Contractors today. During the past 12 months, the industry has added 282,000 net new construction jobs, which translates into a 4 percent increase in total industry-wide employment.

Nonresidential construction employment declined by 3,600 net new jobs last month. Job losses were split between the nonresidential building subsector (down 800) and nonresidential specialty trade contractors (down 3,000), while heavy and civil engineering added 200 net new jobs.

Construction unemployment rose to 3.9 percent in November, 0.3 percentage points higher than the previous month. However, industry unemployment is 1.1 percentage points lower compared to the same time last year. The official national unemployment rate remained unchanged at 3.7 percent.

“Today’s employment report helps shift what has become an increasingly negative narrative regarding the U.S. economy’s 2019 economic prospects,” said ABC Chief Economist Anirban Basu. “This past week has been focused on market volatility, growing trade deficits, and a weakening global economy. And though today’s headline number of 155,000 was a bit disappointing, it is consistent with the notion that the U.S. economy continues to expand, albeit at a plodding pace. That said, there is evidence of lingering strength in both industrial and service segments.

“Moreover, the somewhat softer employment growth registered during the past three months, which has averaged 170,000 net new jobs created per month, renders it more likely that the Federal Reserve will be able to slow the pace of monetary tightening in 2019,” said Basu. “Many observers have been concerned that aggressive tightening in 2019 could yield a downturn in 2020. That’s still possible, but softer job growth supplies the Federal Reserve with greater policy flexibility. There was also little evidence that wage growth accelerated last month. Average hourly earnings are up 3.1 percent over the past year, unchanged from October 2018.

“While it is true that nonresidential construction employment declined last month, the decline was minimal and may simply be attributable to wildfires in California and weather,” said Basu. “Most contractors continue to report healthy backlog and difficulty securing sufficient talent. This implies that industry job growth is likely during the months ahead on a seasonally adjusted basis. Contractors will want to look carefully at leading indicators during the coming months, as the economic forecast is admittedly shrouded in murkiness. Further market volatility, additional losses in executive confidence and slipping leading indicators could signal that 2020 could usher forth the next economic downturn, which for many construction firms would translate into weaker performance in 2021 and perhaps beyond.”

Press Release from Associated General Contractors of America (AGC)

Full release

Construction Employment Rises by 5,000 Jobs in November and 282,000 for the Year; Hourly Pay Jumps 3.7%, Unemployment Rate Falls to 3.9%

Four Percent Year-over-Year Job Growth in Construction Exceeds Overall Growth But Industry is Struggling to Find Qualified Workers

Construction employment increased by 5,000 jobs in November and by 282,000 jobs over the past year while the industry’s average pay continued increases and unemployment decreased to a historic low, according to an analysis of new government data by the Associated General Contractors of America. Association officials called on public officials to enhance career training and education and employment-based immigration reform to ensure an adequate supply of qualified workers.

“Demand for construction remains strong and pay is rising faster than in the overall economy,” said Ken Simonson, the association’s chief economist. “But contractors are having increasing difficulty finding qualified workers as industry unemployment slides to historic lows.”

Construction employment totaled 7,312,000 in November, a gain of 4.0 percent over the past 12 months. Employment in residential construction—comprising residential building and specialty trade contractors—grew by 7,900 jobs for the month and 127,900 jobs over the past 12 months, a 4.7 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—inched down by 3,600 jobs in November and grew by 154,100 jobs during the past year, a 3.6 percent increase, the economist remarked.

Hourly earnings in the industry averaged $30.28 in November, an increase of 3.7 percent from a year earlier. Average hourly earnings in construction are now 10.7 percent higher than the average for all nonfarm private-sector jobs, which rose 3.1 percent in the past year, to $27.35. Meanwhile, the unemployment rate for jobseekers with construction experience in November was 3.9 percent, down more than a percentage point from 5.0 percent in November 2017. The number of such workers fell to 375,000 from 467,000 a year earlier. Both figures were the lowest for November since the series began in 2000, Simonson noted.

In a survey the association released in August, 80 percent of construction firms were having trouble hiring hourly crafts workers and 81 percent expected that hiring would remain difficult or become harder. In response, association officials put forward a plan that would increase funding to career and technical education and reform immigration.

“Demand for new construction is rising faster than construction firms can add skilled personnel,” said Stephen E. Sandherr, the association’s chief executive officer. “In order to have a skilled workforce and build America, federal officials should invest in career training and push for commonsense immigration reform.”