According to data released today by the US Bureau of Labor Statistics, the national construction industry gained 25,000 jobs on net in May.
Key Takeaways
- The construction industry gained 25,000 jobs on net in May.
- Nonresidential construction employment increased by 22,100 positions on net, with gains in all three subcategories.
- "Since economists generally place far more emphasis on the establishment survey, today’s data will generally be viewed as further indication of ongoing economic momentum. That momentum is especially apparent in the nation’s nonresidential construction segment."
Press Release from Associated Builders and Contractors, Inc (ABC)
WASHINGTON, June 2—The construction industry added 25,000 jobs on net in May, 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 increased by 192,000 jobs, an increase of 2.5%.
Nonresidential construction employment expanded by 22,100 positions on net, with growth in all three subcategories. Heavy and civil engineering added 10,700 positions, while nonresidential specialty trade and nonresidential building added 7,200 and 4,200 jobs, respectively.
The construction unemployment rate dropped to 3.5% in May. Unemployment across all industries increased from 3.4% in April to 3.7% last month.
“Based on recent data, simply determining what is happening right now in the economy is difficult,” said ABC Chief Economist Anirban Basu. “While the establishment survey indicates that the nation added 339,000 jobs in May, smashing through consensus expectations, the household survey indicates that America lost 310,000 jobs for the month. Since economists generally place far more emphasis on the establishment survey, today’s data will generally be viewed as further indication of ongoing economic momentum.
“That momentum is especially apparent in the nation’s nonresidential construction segment,” said Basu. “The construction industry unemployment rate is now below the economywide unemployment rate, and there are plenty of available, unfilled construction jobs. Among the principal takeaways is that there will continue to be substantial upward pressure on construction worker compensation during the months ahead.
“At the same time, there remain signs of weakness in the economy,” said Basu. “Manufacturing appears to be in its own recession. A number of state economies show evidence of commonplace definitions of recession. With credit conditions worsening, interest rates set to remain higher for longer, growing concerns regarding the health of commercial real estate and more consumers struggling to pay monthly bills in an inflationary environment, the onset of economywide recession later this year remains a possibility. Developer-driven construction activity is especially at risk of a sharp downturn at some point over the next year.”
Press Release from Associated General Contractors of America (AGC)
Most of the Construction Gains Occurred in the Nonresidential Construction Sector While Firms Now Pay Workers 19 Percent More Compared to the Average Job as they Struggle to Recruit New People
The construction sector added 25,000 jobs in May while the sector’s unemployment rate fell to its second lowest rate for the month and pay levels in the industry continued to rise, according to an analysis of new government data the Associated General Contractors of America released today. Association officials said construction firms are boosting pay and taking other steps to recruit workers amid tight labor conditions.
“Demand for construction workers remains strong, outside of homebuilding,” said Ken Simonson, the association’s chief economist. “Contractors continue to report their primary challenge is finding qualified workers, not finding projects or most materials.”
Construction employment in May totaled 7,928,000, seasonally adjusted, an addition of 25,000 or 0.3 percent from the month prior. The sector has added 192,000 jobs during the past 12 months, an increase of 2.5 percent. Nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 22,100 employees in May. Meanwhile, employment at residential building and specialty trade contractors only grew by 2,500 or 0.1 percent.
The unemployment rate among jobseekers with construction experience declined from 3.8 percent in May 2022 to 3.5 percent, the second lowest May rate in the 23-year history of the data. A separate government report released earlier this week reported that new hires in construction at the end of April totaled 460,000, growing 3 percent from one year prior. The new hires figure does not account for the number of workers who left the industry during the same timeframe.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—jumped by 6.0 percent over the year to $34.07 per hour. Construction firms in May provided a wage “premium” of nearly 19 percent compared to the average hourly earnings for all private-sector production employees.
Association officials said firms are boosting pay and taking other steps to recruit workers. But they noted that the federal government remains one of the biggest obstacles to construction workforce development by spending $5 to encourage students to pursue college degrees and service sector jobs for every dollar it invests in career and technical education.
“Construction demand is strong, firms are looking to hire, and federal officials are investing billions in construction and infrastructure,” said Stephen E. Sandherr, the association’s chief executive officer. “Yet that same federal government is doing its best to discourage students from pursuing high-paying careers in construction.”
