Nonresidential Construction Employment Expands in August

According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 14,000 net new jobs in August.

Key Takeaways

  • The construction industry added 14,000 net new jobs in August and, on a year-over-year basis, has expanded by 177,000 jobs, an increase of 2.4%.
  • The construction unemployment rate stood at 3.6% in August, up .2 percentage points from the same time last year. Unemployment across all industries stood at 3.7% in August, unchanged from the 2 previous months.
  • After losing 2,800 jobs in July, nonresidential construction employment increased by 11,600 new jobs in August. Nonresidential specialty trade contractors added 5,400 jobs last month, and heavy and civil engineering added 4,400 net new jobs.
  • "Nonresidential construction continues to add jobs, despite difficulty securing sufficiently trained workers. And with a construction backlog of nearly nine months as of June 2019, data indicates that contractors continue to enjoy substantial demand for their services despite the nearly continuous drumbeat of dismal economic forecasts for 2020 and/or 2021."


Press Release from Associated Builders and Contractors, Inc (ABC)

Nonresidential Construction Employment Expands in August, Says ABC

WASHINGTON, Sept 6—The construction industry added 14,000 net new jobs in August, 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 177,000 jobs, or 2.4%.

Nonresidential construction employment increased by 11,600 net jobs in August and is up by 114,200 net jobs over the last 12 months, translating into 2.5% growth. The majority of job gains emerged from nonresidential specialty trade contractors, which added 5,400 jobs last month and nearly 103,000 positions over the past year. Heavy and civil engineering added 4,400 net new jobs, while nonresidential building added 1,800 jobs on a monthly basis.

The construction unemployment rate stood at 3.6% in August, up 0.2 percentage points from the same time last year. Unemployment across all industries stood at 3.7% in August, unchanged from the previous month.

“While job growth across all industries fell short of projections, today’s employment report was just about perfect,” said ABC Chief Economist Anirban Basu. “Yes, employment growth has been softening for quite some time, with average monthly job growth totaling 150,000 during the last six months after approaching 200,000 during the prior six-month period. And employment growth estimates were also revised lower for both June and July. That said, looking beyond the headline number, August’s labor market performance was more than respectable, even accounting for about 25,000 of the jobs added being for temporary Census work.

“Average hourly earnings rose 0.4% in August and 3.2% over the past year, which was a bit better than expected” said Basu. “The labor force participation rate expanded to 63.2%, tying for its highest level since August 2013. Nonresidential construction continues to add jobs, despite difficulty securing sufficiently trained workers. And with a construction backlog of nearly nine months as of June 2019, data indicates that contractors continue to enjoy substantial demand for their services despite the nearly continuous drumbeat of dismal economic forecasts for 2020 and/or 2021. All of this is consistent with rising compensation for many Americans, which should keep the consumer-led expansion firmly in place for the balance of 2019.

“Despite some of the positive indications, the employment data are sufficiently mixed to allow the Federal Reserve to cut rates once again in the near term,” said Basu. “While that probably won’t mean much to broader U.S. economic performance, it would be welcome news for many financial market investors and could fractionally lower borrowing costs for certain economic actors, which could support ongoing momentum in the nation’s nonresidential construction segment.”


Press Release from Associated General Contractors of America (AGC)


Construction Employment Rises by 14,000 in August and 177,000 In 12 Months; Low Unemployment Rate, Association Survey Indicate Worker Shortage

Average Hourly Earnings in Construction Top Private Sector Average by 9.7 Percent as Construction Firms Continue to Boost Pay and Benefits in Effort to Attract and Retain Qualified Hourly Craft Workers

Construction employment increased by 14,000 jobs in August and by 177,000, or 2.4 percent, over the past 12 months, while the number of unemployed jobseekers with construction experience remained near historic lows, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that 80 percent of contractors reported they were having a hard time finding enough qualified hourly craft workers to hire according to the results of a survey the association released last week.

“Construction employment gains would likely have been higher if firms could find even more people to hire,” said Ken Simonson, the association’s chief economist. “Our survey found that 91 percent of respondents said their firms expect to hire in the next 12 months, but overwhelmingly, they are finding most craft positions hard to fill. Even as firms are raising pay and benefits, doing more in-house training and investing in labor-saving equipment, labor shortages are changing the way many firms bid, schedule and manage their projects.”

Simonson observed that the 2.4 percent growth in construction employment between August 2018 and August 2019 was the slowest in more than six years but that the rate remained well above the 1.4 percent increase in total nonfarm payroll employment. There were 361,000 unemployed jobseekers who last worked in construction—an unemployment rate of 3.6 percent for such workers. Simonson noted those were the second-lowest August levels since the series began in 2000.

Average hourly earnings in construction—a measure of all wages and salaries—increased 2.7 percent over the year to $30.84. That figure was 9.7 percent higher than the private-sector average of $28.11, the association official noted. He added that two-thirds of firms responding to the association’s survey had raised base pay rates for hourly craft workers in the past year because of difficulty in filling positions, while 58 percent of firms had done so for salaried workers. Many respondents also reported providing incentives, bonuses and larger contributions to benefit plans.

Association officials said the industry was taking a broad range of steps to cope with labor shortages, including boosting pay, expanding training programs and becoming more efficient. But they cautioned that labor shortages are still impacting construction schedules and costs. They urged Congress to pass measures to boost career and technical education and provide a way for more immigrants with construction skills to legally enter the country.

“Few other jobs in today’s economy pay as well without requiring most workers to pay for a costly college education as do careers in construction,” said Stephen E. Sandherr, the association’s chief executive officer. “Construction firms are doing all they can to address workforce shortages, but it would certainly help if federal officials would boost investments in career and technical education and allow for more individuals with construction skills to legally enter the country as well.”

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