According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 4,000 net new jobs in May.
Key Takeaways
- The construction industry added 4,000 net new jobs in May and, on a year-over-year basis, has expanded by 215,000 jobs, an increase of 3.0%.
- Nonresidential employment lost 1,500 net jobs last month but is up by 136,000 jobs compared to the same time last year. Heavy and civil engineering lost 9,400 jobs last month, but is still up by 30,000 jobs or 2.9% on a year-over-year basis.
- "For years, ABC analysts have pointed to 2020 as a likely period during which the next economic downturn will begin. That conjecture remains sensible, especially in light of today’s release."
- "Many construction firms report they are raising pay and increasing benefits to help recruit from the dwindling pool of available workers.”
Press Release from Associated Builders and Contractors, Inc (ABC)
Construction Employment Sees Modest Gains in May, Says ABC
WASHINGTON, June 7 – The construction industry added 4,000 net new jobs in May, according to an Associated Builders and Contractors analysis of data released today from the U.S. Bureau of Labor Statistics. On a year-over-year basis, construction employment has expanded by 215,000 jobs, an increase of 3.0%.
Nonresidential employment lost 1,500 net jobs last month but is up by 136,000 jobs compared to the same time last year.
While nonresidential specialty contractors added 7,600 net new positions in May, heavy and civil engineering lost 9,400 jobs. Heavy and civil engineering is still up by 30,000 jobs or 2.9% on a year-over-year basis. Nonresidential building added 300 net new jobs for the month.
The unemployment rate across the industry was 3.2% in May, down 1.2% from the same time last year. The national unemployment rate across all industries remained unchanged at 3.6%.
“The leading source of concern in the U.S. economy has been steadily shifting from inflation to the pace of growth for several months,” said ABC Chief Economist Anirban Basu. “Today’s data release pushes us further in that direction. While the U.S. economic growth is slowing—averaging around 3% during the past five quarters— that in and of itself doesn’t mean much. Perhaps what matters more is why the economy has begun to soften and what the potential explanations mean for construction firms."
“At the top of the list is a softening global economy,” said Basu. “Among other things, this has helped to limit corporate earnings growth, which, in turn, translates into weaker business spending. Slipping activity in certain key industries has also contributed, including in the U.S. automotive and airplane manufacturing sectors, as well as current trade conflicts. For years, ABC analysts have pointed to 2020 as a likely period during which the next economic downturn will begin. That conjecture remains sensible, especially in light of today’s release."
“For contractors,” said Basu, “many of whom have a backlog that will carry them through 2020, this suggests emerging weakness in demand for construction services at some point in 2021 or 2022. Of course, much could happen to disrupt this trajectory, including a U.S.-China trade deal, ratification of the new North American trade deal, a federal infrastructure plan and a Federal Reserve that instills confidence in various economic actors.”
Press Release from Associated General Contractors of America (AGC)
Average Hourly Earnings in Construction Top Private Sector Average by 10 Percent; Association Officials Call for Doubling Career and Technical Education Funding, Immigration Relief to Attract Needed Workers
Construction employment increased by 4,000 jobs in May and by 215,000, or 3.0 percent, over the past 12 months, while the number of unemployed jobseekers with construction experience fell to a record low, according to an analysis of new government data by the Associated General Contractors of America. Association officials said that an extremely tight job market, rather than softening demand for projects, probably explains the modest employment increase in May.
“The construction industry unemployment rate in May was even lower than for the overall economy,” said Ken Simonson, the association’s chief economist. “Even though average pay in construction is 10 percent higher than in the private sector as a whole, the number of job openings keeps climbing.”
Simonson noted that the unemployment rate for jobseekers who last worked in construction declined to 3.2 percent from 4.4 percent in May 2018, and the number of such workers decreased over the year from 415,000 to 294,000. Both the rate and number of unemployed were the lowest for any month since the series began in 2000, the economist added. Another government series showed that the number of job openings in construction, last reported for April, totaled 360,000, the highest April total in the 19-year history of that series.
Average hourly earnings in construction—a measure of all wages and salaries—increased 3.2 percent over the year to $30.68. That figure was 10 percent higher than the private-sector average of $27.83, the economist noted. “Many construction firms report they are raising pay and increasing benefits to help recruit from the dwindling pool of available workers,” Simonson added.
Association officials urged Congress and the Trump administration to boost investments in career and technical education and to make needed reforms to the nation’s immigration system. Specifically, they called on Washington officials to double funding for career and technical education programs over the next five years to expose even more students to high-paying construction career opportunities. They also called for measures to allow more immigrants with construction skills to legally enter the workforce and to address the status of workers already in the country.
“Federal officials can help bring new workers into the construction industry so firms can keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “Funding more career and technical education programs is a proven way to expose more young adults to the many high-paying career opportunities available in this industry.”
