According to data released today by the US Bureau of Labor Statistics, the national construction industry lost 31,000 jobs in February, the biggest drop since December 2013. This follows adding 53,000 in January.
The losses were seen in all major sectors:
- Residential Building - lost 1,600 jobs in February, but up 43,900 jobs over February 2018
- Nonresidential Building - lost 3,000 jobs in February, but up 9,900 jobs over February 2018
- Heavy and Civil Engineering Construction - lost 13,200 jobs in February, but up 40,600 jobs over February 2018
- Specialty Trade Contractors - lost 13,500 jobs in February, but up 129,000 jobs over February 2018
Press Release from Associated Builders and Contractors, Inc (ABC)
Jobs Decline in Construction Sector for the First Time in More Than Two Years, Says ABC
WASHINGTON, March 8—According to an analysis by the Associated Builders and Contractors of data released today by the U.S. Bureau of Labor Statistics, the construction industry lost 31,000 net new jobs in February. Overall, nonresidential employment decreased by 20,400 net new positions compared to January, with losses split between nonresidential building (-3,000), heavy and civil engineering (-13,200) and nonresidential specialty contractors (-4,200). However, industry employment is up 223,000 jobs since February 2018, an increase of 3.1 percent.
Unemployment in the construction industry dropped slightly to 6.2 percent, down 0.2 percentage points from January. On a year-over-year basis, unemployment is 1.6 percentage points lower. Nationwide unemployment decreased to 3.8 percent.
“As each major nonresidential construction segment experienced reduced employment in February, there seems little doubt that winter weather helped to shape the February employment data,” said ABC Chief Economist Anirban Basu. “Heavy and civil engineering, which includes road building, is especially susceptible to poor weather conditions, and this segment saw the largest job losses.
“Moreover, other weather-impacted sectors of the economy also registered job losses or failed to add jobs, including retail (-6,100), transportation and warehousing (-3,000), and leisure and hospitality (0),” said Basu. “While it’s likely that there were additional factors shaping today’s jobs numbers, such as side effects from the federal shutdown, there has been growing evidence of weaker global economic growth for months. A number of leading economic indicators have been suggesting that economic growth is set to slow. There also have been other disappointing data releases recently, including those pertaining to December retail sales.
“The implication is that one cannot simply ignore today’s jobs report as pure aberration,” said Basu. “While it is likely that future months will be associated with better job growth numbers than today’s 20,000 jobs headline, U.S. economic growth appears to be generally softer in 2019 than it was in 2018. Today’s data also indicate lower construction unemployment and faster economy-wide wage growth, which all things being equal stand to negatively impact construction firm profitability. While recession is not immediately imminent, today’s jobs report should be considered a reminder that economic circumstances can change quickly, which means that contractors are advised to continue to manage cash flow carefully.”
Reuters Article
U.S. economy gains paltry 20,000 jobs in February
WASHINGTON (Reuters) - U.S. job growth almost stalled in February, with the economy creating only 20,000 jobs as construction and retail payrolls dropped, which could raise concerns about a sharp slowdown in economic activity.
The job growth reported by the Labor Department on Friday was the weakest since September 2017, but it probably understated the health of the labor market as other details of the closely watched employment report were strong.
The unemployment rate fell back to below 4 percent and annual wage growth was the best since 2009. In addition, data for December and January were revised to show 12,000 more jobs created than previously reported.
Still, the economy that in July will mark 10 years of expansion, the longest on record, is slowing and the weakening job gains support the Federal Reserve’s “patient” approach toward further interest rate increases this year.
“The sharp slowdown in payroll employment growth in February provides further evidence that economic growth has slowed in the first quarter,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “That adds weight to our view that the Fed will not be raising interest rates this year.”
Economists polled by Reuters had forecast non farm payrolls rising by 180,000 jobs last month and the unemployment rate falling to 3.9 percent.
The slowdown likely reflected the fading weather-related boost in the prior two months and workers becoming more scarce. A stock market selloff and jump in U.S. Treasury yields in late 2018, which tightened financial market conditions, were also likely factors.
About 390,000 workers stayed at home in February because of the bad weather, not much different from previous years. The length of the average workweek fell to 34.4 hours from 34.5 hours in January.
