According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 42,000 net new jobs in February.
Key Takeaways
- The construction industry added 42,000 net new jobs in February 2020. On a year-over-year basis, industry employment has expanded by 223,000 jobs, an increase of 3.0%.
- The construction unemployment rate was 5.5% in February, down .7 percentage points from the same time last year. Unemployment across all industries declined to 3.5% last month.
- Nonresidential construction employment increased by 19,800 jobs on net in February and is up by 139,900 net jobs during the last 12 months.
Press Release from Associated Builders and Contractors, Inc (ABC)
Nonresidential Construction Employment Expands in February, Says ABC
WASHINGTON, March 6—The construction industry added 42,000 net new jobs in February, 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 223,000 jobs, an increase of 3.0%.
Nonresidential construction employment increased by 19,800 jobs on net in February and is up by 139,900 net jobs over the last 12 months. There were job gains in all three nonresidential segments, with the largest increase in nonresidential specialty trade contractors, which added 13,400 jobs. Remaining job additions were split evenly between nonresidential building (+3,400) heavy and civil engineering (+3,000).
The construction unemployment rate was 5.5% in January, down 0.7 percentage points from the same time last year. Unemployment across all industries declined back to 3.5% last month, effectively a 50-year low.
“Seldom is there a jobs report that tells us less about the direction of the U.S. economy than this one,” said ABC Chief Economic Anirban Basu. “While there is scarcely any evidence of coronavirus impact in today’s employment release, clearly, the trajectory of financial markets and the broader economy has shifted markedly over the last two weeks. While the level of construction activity is unlikely to be fundamentally altered in the near-term—except for when sick workers are asked to stay home—these impacts will eventually catch up to the nation’s construction sector.
"On the front lines of the intensifying public health crisis are industries such as travel, lodging, restaurants, sporting events and other economic elements that involve large public gatherings,” said Basu. “With many corporate entities and households deeply indebted, a fragility in the U.S. economy is now being exposed. Not only will this translate into a surge in bankruptcies as the crisis deepens, but it will also result in generally weaker balance sheets, which could eventually impact design work and construction starts.
“It is important not to overstate the magnitude of the outbreak,” said Basu. “America has experienced other public health crises in recent years. After each occasion, the broader economy recovered, often quickly. That said, this time feels different, given the ease with which the affliction has spread through a growing number of American communities. Even before the outbreak, contractors were urged to begin to raise cash as a defensive mechanism against the next downturn. That advice remains firmly in place.”
Press Release from Associated General Contractors of America (AGC)
Average Hourly Earnings in Construction Top Private Sector Average by 9.9 Percent as Construction Firms Continue to Boost Pay and Benefits in Effort to Attract and Retain Qualified Hourly Craft Workers
Construction employment increased by 42,000 jobs in February and by 223,000 or 3.0 percent over the past 12 months, as the industry’s unemployment rate hit a new February low, according to an analysis of new government data by the Associated General Contractors of America. Association officials said some of the gains were attributable to mild winter weather in many parts of the country last month but added that the main reason for the gains was strong demand for construction services.
“Contractors are off to a fast start in 2020, adding 91,000 jobs in the first two months—the most in nearly two years,” said Ken Simonson, the association’s chief economist. “Although some of the gains probably reflect unusually mild winter weather in much of the nation, there is no question that contractors have been upbeat about the volume of work available.”
Total construction employment climbed to 7,646,800, the highest level since July 2007, with gains in both residential and nonresidential employment. The 3.0 percent growth in construction employment between February 2019 and February 2020 was nearly double the 1.6 percent increase in total nonfarm payroll employment. Average hourly earnings in construction – a measure of all wages and salaries – increased 3.0 percent over the year to $31.35. That figure was 9.9 percent higher than the private-sector average of $28.52.
Simonson observed that both the number of unemployed workers with recent construction experience – 531,000 – and the unemployment rate for such workers – 5.5 percent – were the lowest ever for February in the 21-year history of those series. He said these figures are consistent with reports from contractors as part of the association’s annual outlook that experienced construction workers are hard to find.
The employment data were collected in mid-February. Since then, the novel coronavirus has begun to affect some industries, but there have been no reports of construction sites being affected or of projects being deferred or canceled, the economist noted.
Association officials said that it is hard to estimate whether the spreading coronavirus will have a significant impact on future demand for construction or the sector’s employment levels. They said the best way for Washington officials to address the economic uncertainty was to act quickly to pass measures to rebuild the nation’s airports, waterways, highways and transit systems. They added that the association was launching a new round of advertising via its Americans for Better Infrastructure Campaign to educate constituents and members of Congress on the economic benefits of investing in infrastructure.
“The industry clearly benefited from strong demand in February, but it is unclear whether and how the coronavirus might impact construction employment,” said Stephen E. Sandherr, the association’s chief executive officer. “Passing new infrastructure measures will support needed fixes to our transportation network while adding a new level of stability in what are likely to be uncertain times.”
