According to data released today by the US Bureau of Labor Statistics, the national construction industry added 25,000 jobs on net in January.
Key Takeaways
- The construction industry added 25,000 jobs on net in January.
- Nonresidential construction employment increased by 19,300 positions on net, with growth in two subcategories (nonresidential specialty trade and nonresidential building.
- "It is virtually impossible to reconcile today’s employment numbers with other phenomena in the U.S. economy. America’s labor market remains red hot despite falling retail sales, declining industrial production, bloated inventories and high-profile layoff announcements."
Press Release from Associated Builders and Contractors, Inc (ABC)
Construction Adds 25,000 Jobs in January, Says ABC
WASHINGTON, Feb. 3—The construction industry added 25,000 jobs on net in January, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by 294,000 jobs, an increase of 3.9%.
Nonresidential construction employment increased by 19,300 positions on net, with growth in two of the three subcategories. Nonresidential specialty trade added 16,500 net new jobs, while nonresidential building added 4,000 positions. Heavy and civil engineering lost 1,200 jobs for the month.
The construction unemployment rate rose to 6.9% in January. Unemployment across all industries declined from 3.5% in December to 3.4% last month.
"It is virtually impossible to reconcile today’s employment numbers with other phenomena in the U.S. economy,” said ABC Chief Economist Anirban Basu. “America’s labor market remains red hot despite falling retail sales, declining industrial production, bloated inventories and high-profile layoff announcements."
"Today’s jobs report strongly suggests that the Federal Reserve has more work to do,” said Basu. “While many will cheer the jobs report, the bond market did not, with interest rates rising immediately in response to the persistent and surprising strength of the nation’s employment market. While contractors may be thrilled to hear that the labor market remains strong, associated upticks in borrowing costs increase the likelihood of a recession sometime later this year."
"Many contractors may shrug off such concerns given current elevated backlog,” said Basu. “ABC surveys reveal that contractors plan to continue to hire and expand operations. Indeed, the nation’s nonresidential construction industry added more than 19,000 jobs in January. But the outlook may dim later this year as the cost of project financing continues to rise, setting the stage for what could be a meaningfully weaker 2024, at least in construction segments that are primarily privately financed."
Press Release from Associated General Contractors of America (AGC)
Industry Employment Hits New Record Amid Strong Demand, But Firms Would Have Hired Even More Workers as Construction Officials Call for Measures to Enable More People to Work in the Industry
Construction firms added 25,000 employees in January and raised wages for hourly workers more steeply than other sectors, according to an analysis by the Associated General Contractors of America of new government data. Association officials said the industry was benefitting from relatively strong demand for construction projects as firms struggle to fill available positions in the sector.
“Construction employment and pay gains outpaced the economy as a whole in the past year, showing that demand for projects remains strong,” said Ken Simonson, the association’s chief economist. “In fact, most contractors would like to hire even more workers and are raising pay in an effort to attract them.”
Construction employment totaled a record 7,884,000, seasonally adjusted, in January, an increase of 294,000 or 3.9 percent from a year earlier. That growth rate topped the 3.3 percent rise in total nonfarm employment.
Nonresidential firms—comprising nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 19,300 employees in January and 179,200 employees or 4.0 percent over 12 months. Residential building and specialty trade contractors together added 5,500 employees for the month and 114,600 employees or 3.6 percent over the year.
Pay levels in the construction industry continued to increase in January at a faster pace than in the overall private sector. Average hourly earnings for production and nonsupervisory workers in construction—mostly hourly craft workers—climbed by 6.2 percent, from $31.44 in January 2022 to $33.38 last month. That increase exceeded the 5.1 percent rise in average pay for all private sector production workers. Workers in construction now earn an average of 18.1 percent more per hour than in the private sector as a whole.
Job openings in construction at the end of 2022 totaled 359,000, the highest December total in the 23-year history of the data. Simonson said that figure reinforced contractors’ reports that they are seeking far more workers than they have been able to hire, despite the industry’s large job gains over the past year.
Association officials said the industry likely would have added even more jobs if firms could find more people to hire, noting that 80 percent of firms in the association’s recent survey reported having a hard time finding qualified workers to hire. They urged federal officials to allow more people with construction skills to lawfully enter the country to work in the industry. And they urged federal officials to boost funding and support for all types of construction-focused education and training programs.
“Construction firms are doing everything in their power to recruit even more people into the industry,” said Stephen E. Sandherr, the association’s chief executive officer. “Closing a federal funding gap that puts $5 into college-track programs for every dollar spent on career and technical education will help expose many more workers to high-paying career opportunities in fields like construction.”
