According to data released today by the US Bureau of Labor Statistics, the national construction industry added 20,000 net new jobs in December.
Key Takeaways
- The construction industry added 20,000 net new jobs in December 2019. On a year-over-year basis, industry employment has expanded by 151,000 jobs, an increase of 2.0%.
- The construction unemployment rate was 5.0% in December, down 0.1 percentage points from the same time last year.
- Nonresidential construction employment increased by 16,700 jobs on net in December and is up by 100,600 net jobs during the last 12 months.
- “Recent data indicate that nonresidential construction spending is no longer expanding rapidly, and this may be due in part to the fact that the industry is approaching its output ceiling due to a shortage of available workers.”
Press Release from Associated Builders and Contractors, Inc (ABC)
Nonresidential Construction Employment Up in December, Says ABC
WASHINGTON, Jan. 10—The construction industry added 20,000 net new jobs in December 2019, 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 expanded by 151,000 jobs, an increase of 2.0%.
Nonresidential construction employment increased by 16,700 jobs on net in December and is up by 100,600 net jobs during the last 12 months. There were job gains in all three major nonresidential segments: Nonresidential specialty trade contractors added 9,800 jobs; nonresidential building, 5,100; and heavy and civil engineering, 1,800.
The construction unemployment rate was 5.0% in December, down 0.1 percentage points from the same time last year. Unemployment across all industries was unchanged at 3.5%.
“This was another very good jobs report, though many analysts will emphasize some of the weaker points,” said ABC Chief Economist Anirban Basu. “For instance, the today’s reading came in at 145,000 net new jobs in December, short of the consensus estimate of an additional 160,000 jobs. Moreover, wage growth on a year-over-year basis was a bit softer than expected, and many of the jobs added in December were in lower-wage segments.
“However, this level of wage growth remains sufficient to fuel the current consumer spending cycle while helping to contain inflation, which keeps the cost of capital low,” said Basu. “Among other benefits, this supports the efforts of developers and others who purchase construction services. This dynamic allowed construction to generate 20,000 net new jobs in December—the majority of which were in the nonresidential construction sector— while sustaining a healthy level of backlog, according to the ABC Construction Backlog Indicator.
“The implication is that demand for construction services will remain elevated over the next few months,” said Basu. “The primary challenge will continue to be the hunt for high quality workers, especially as the majority of nonresidential contractors intend to increase staffing levels over the next six months, according to ABC’s Construction Confidence Index. With home builder confidence hitting a 20-year high in December, nonresidential contractors may find that competition for workers with residential builders will become even fiercer. Recent data indicate that nonresidential construction spending is no longer expanding rapidly, and this may be due in part to the fact that the industry is approaching its output ceiling due to a shortage of available workers.”
Press Release from Associated General Contractors of America(AGC)
Survey Finds Optimism about 2020 along with Even Tighter Labor Supply as Construction Unemployment Sets Record December Low; Association Calls for Government to Boost Career Opportunities, Immigration
Construction employment increased by 20,000 jobs in December and by 151,000, or 2.0 percent, in all of 2019, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that its recent survey(link is external) found three out of four contractors expect to keep adding workers in 2020, but even more respondents found it difficult to fill positions in 2019, and a majority anticipate it will be as hard or harder to do so in 2020. Officials called on the federal government to increase funding for career and technical education and expand employment-based immigration for workers whose skills are in short supply.
“More than four out of five respondents to our survey said they were having a hard time filling salaried or hourly craft positions in 2019,” said Ken Simonson, the association’s chief economist. “Nearly two-thirds of the firms say that hiring will be hard or harder this year. In light of those staffing challenges, costs have been higher than anticipated for 44 percent of respondents and projects took longer than anticipated for 40 percent of them. As a result, 41 percent of respondents have put higher prices into their bids or contracts and 23 percent have put in longer completion times.”
Simonson observed that both the number of unemployed workers with recent construction experience (489,000) and the unemployment rate for such workers (5.0 percent) were the lowest ever for December in the 20-year history of those series. He said these figures support the survey’s finding that experienced construction workers are hard to find.
“Contractors are confident that there will be plenty of projects in 2020,” Simonson added. “Our survey found that for each of 13 project types, more contractors expect an increase in 2020 than a decrease in the dollar value of projects they compete for.”
Association officials said the optimistic outlook for projects depends on having an adequate supply of qualified workers. The officials urged the Trump administration and Congress to double funding for career and technical education over the next five years, pass the JOBS Act to expand opportunities for students seeking alternatives to college, and enable employers who demonstrate an unfilled need for workers to bring them in from outside the U.S.
“Construction can play a major role in sustaining economic growth, but only if the industry has an expanding supply of both qualified workers and new entrants to replace retirees,” said Stephen E. Sandherr, the association’s chief executive officer. “Construction firms are working hard to overcome labor shortages, but federal officials must do their part by adequately funding career and technical education, making it easier for students to qualify for loans for short-term technical education programs and putting in place needed immigration reforms.”
