According to the data released last month by the US Bureau of Labor Statistics, the national construction industry added 8,000 net new jobs on a seasonally adjusted basis in September. The nonresidential sector added 11,700 jobs (mostly in the nonresidential specialty trade contractors segment), meaning that the residential construction segment lost several thousand jobs.
Press Release from Associated Builders and Contractors, Inc (ABC)
WASHINGTON, Oct. 6—The national construction industry added 8,000 net new jobs on a seasonally adjusted basis in September, according to an analysis by Associated Builders and Contractors (ABC) of today’s release from the U.S. Bureau of Labor Statistics. The nonresidential sector added 11,700 jobs for the month, which means that residential construction lost several thousand jobs. Nonresidential specialty trade contractors paced the segment, adding 8,500 net new jobs on a monthly basis.
The construction industry unemployment rate, which is available only on a nonseasonally adjusted basis, remained unchanged at 4.7 percent. The nationwide unemployment rate fell two tenths of a percentage point to 4.2 percent, its lowest level since February, 2001. By losing 33,000 jobs on net in September, the nation’s economy ends a winning streak that lasted approximately seven years. The release also indicates that wage pressures are building. Perhaps surprisingly, the labor force participation rate edged higher to 63.1 percent in September from 62.9 percent the month prior.
“Investors on Wall Street and other stakeholders will be scratching their heads wondering how to interpret these data,” said ABC Chief Economist Anirban Basu. “The loss of 33,000 jobs on net represents a radical departure from the trend of the past seven years, and therefore the presumption must be that the Hurricanes Harvey and Irma are responsible for the bulk of dislocation.
“The storms may also help explain the significant growth in employment among nonresidential specialty trade contractors, who would be among the first to support rebuilding efforts,” said Basu. “These are the people who courageously fix roofs, deal with broken glass and begin the process of helping property owners and businesses restart their enterprises. Conversely, the addition of 11,700 net new jobs in nonresidential construction in September may simply be a reflection of the ongoing increase in demand for human capital that has been observed in recent months.
“In the final analysis, U.S. construction industry leaders would be wise not to base key economic decisions on September employment data,” said Basu. “These data are simply too noisy to be enlightening. However, if there is anything to be gleaned from today’s release, it is that wage pressures are becoming rapidly more apparent. With the nation’s unemployment rate trending down again, the pressures will only be exacerbated, particularly in the U.S. construction industry as the efforts to rebuild parts of Texas, Louisiana, Florida, Puerto Rico and the U.S. Virgin Islands begins in earnest.”
Press Release from Associated General Contractors of America (AGC)
Hurricanes Harvey and Irma May Have Affected September Job Totals for Construction and Overall Economy; Association Officials Say Firms Likely Would Have Hired More Workers but Lacked Qualified Candidates
Construction employment increased by 8,000 jobs in September to the highest level since October 2008, amid a tight labor market that may be keeping contractors from hiring as many workers as they need, according to an analysis of new government data by the Associated General Contractors of America. Association officials said construction employment gains would have been higher if more high school students were exposed to construction as a possible career option.
“Construction firms added employees over the past year at a much higher rate than the public and private sectors as a whole, and contractors have been boosting pay to attract more workers,” said Ken Simonson, the association's chief economist. “But with unemployment so low overall and in construction, many contractors are having trouble filling a variety of hourly craft and salaried openings.”
Construction employment totaled 6,911,000 in September, a gain of 8,000 for the month and 184,000, or 2.7 percent, over 12 months. The economist pointed out that the year-over-year growth rate in industry jobs was more than double the 1.2 percent rise in total nonfarm payroll employment. He cautioned that employment figures for both the construction industry and the total were likely distorted in September by temporary impacts from Hurricanes Harvey and Irma.
Residential construction—comprising residential building and specialty trade contractors—shed 7,200 jobs in September but added 80,600 jobs, or 3.1 percent, over the past 12 months. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 11,700 jobs in September and 103,300 positions, or 2.5 percent, over 12 months.
The construction sector’s 4.7 percent unemployment rate and the number of unemployed former construction workers in September, 433,000, were the lowest September figures since 2000. Similarly, the overall unemployment rate and number were the lowest for September since 2000, Simonson noted.
Average hourly earnings in the industry climbed to $29.19, an increase of 3.0 percent from a year earlier. The economist noted that construction pays nearly 10 percent more per hour than the average nonfarm private-sector job in the United States, which pays an average of $26.55 per hour.
Construction officials noted that most firms reported, in a survey released in late August, that they were having a hard time finding enough qualified craft workers to hire. They added that if more young adults were exposed to high-paying jobs in construction as a possible career option, there would likely be more qualified applicants seeking jobs in the field. They urged Senators to vote on House-passed legislation, known as the Perkins Act, that will boost funding and flexibility for career and technical education programs.
“There are a lot of under-employed Americans who would be much better off working in construction, instead of doing shift work for little more than minimum wage,” said Stephen E. Sandherr, the association’s chief executive officer. “It is time to stop stigmatizing jobs like construction just because they require workers to use their hands as well as their brains.”
