According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 84,000 jobs on net in October.
Key Takeaways
- The construction industry added 84,000 jobs on net in October 2020.
- Over the last six months, the industry added 789,000 jobs, recovering approximately 73% of the jobs lost since the beginning of the pandemic.
- "Nonresidential construction’s momentum is especially impressive. Despite tighter lending conditions, negatively impacted state and local government finances and deteriorating commercial real estate fundamentals, nonresidential construction experienced job creation in each of its three major segments. That said, there is still much ground to be made up."
Press Release from Associated Builders and Contractors, Inc (ABC)
Nonresidential Construction Employment Expands in October, Says ABC
WASHINGTON, Nov. 6—The construction industry added 84,000 net new jobs in October, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. During the last six months, the industry has added 789,000 jobs, recovering 73% of the jobs lost during earlier stages of the pandemic.
Nonresidential construction employment added 59,700 jobs on net in October. All three nonresidential subcategories experienced increases; the largest was registered among nonresidential specialty trade contractors, which added 27,500 positions on net. Heavy and civil engineering added 18,800 jobs while nonresidential building added 13,400.
The construction unemployment rate was 6.8% in October, up 2.8 percentage points from the same time last year, but down from 7.1% a month earlier. Unemployment across all industries declined from 7.9% in September to 6.9% last month.
“It’s hard not to stand up and applaud the U.S. economy’s ability to recover,” said ABC Chief Economist Anirban Basu. “Despite political uncertainty, a lingering pandemic, global tumult, and a lack of major new stimulus since April, America’s economy continues to show forward momentum.
“Nonresidential construction’s momentum is especially impressive,” said Basu. “Despite tighter lending conditions, negatively impacted state and local government finances and deteriorating commercial real estate fundamentals, nonresidential construction experienced job creation in each of its three major segments. That said, there is still much ground to be made up. A year ago, nonresidential construction employed nearly 208,000 more people than it does today. The sector has lost nearly 5% of its jobs compared to one year ago, while ABC’s Construction Backlog Indicator shows the average contractor has 1.5 fewer months of backlog than it did one year ago.
“While October’s employment report surprised to the upside, contractors should remain on guard,” said Basu. “Cash management will be particularly important going forward. Another recession is possible as COVID-19 rages across the nation, driving up hospitalizations. While household spending will continue to be a source of positive momentum, state-mandated economic lockdowns are likely to become more of a factor during the weeks ahead. That would result in an interruption to the robust recovery that has been building since May, and would delay the arrival of nonresidential construction’s complete recovery.”
Press Release from Associated General Contractors of America (AGC)
Both Residential and Nonresidential Contractors Added Jobs in October, but Total Construction Employment Remains 3.9 Percent Below February Peak as Pandemic Continues to Depress Demand
Construction employment increased by 84,000 jobs in October, with jobs added in both nonresidential and residential categories, according to an analysis by the Associated General Contractors of America of government data released today. Association officials cautioned, however, that the pandemic is causing a growing number of construction projects to be canceled or delayed, according to a survey the association released in late October.
“The employment data for October is good news, but our latest survey found that only a minority of contractors expect to add to their workforce in the next 12 months,” said Ken Simonson, the association’s chief economist. “As project cancellations mount, so too will job losses on the nonresidential side unless the federal government provides funding for infrastructure and relief for contractors.”
Construction employment climbed to 7,345,000 in October, an increase of 1.2 percent compared to September. However, employment in the sector is down by 294,000 or 3.9 percent since the most recent peak in February, just before the pandemic triggered widespread project cancellations. Despite the employment pickup in October, nonresidential construction employment—comprising nonresidential building, specialty trades, and heavy and civil engineering construction—remains 262,000 jobs or 5.6 percent below its recent peak in February, Simonson noted.
The construction economist added that residential construction, covering residential building and specialty trade contractors, has had a stronger recovery, with employment down by just 32,000 jobs or 1.1 percent since February. The industry’s unemployment rate in October was 6.8 percent, with 674,000 former construction workers idled. These figures were the lowest since the pandemic struck but considerably higher than the October 2019 figures of 4.0 percent and 398,000 workers, respectively, the economist added.
In the association’s October survey, which covered more than 1,000 contractors that perform all types of nonresidential and multifamily construction, three out of four respondents reported that a scheduled project had been postponed or canceled. Only 37 percent of respondents expect their headcount to increase over the next 12 months. That was a sharp drop from the 75 percent who predicted an increase in the association’s annual Hiring and Business Outlook Survey released last December.
Association officials said they were encouraged by reports that Congress plans to consider new coronavirus relief measures before the end of the year. They noted that new measures, including investments in infrastructure, new Paycheck Protection Program flexibility and tax relief, and liability reforms will help offset the impacts of the growing number of project cancellations and delays.
“Congressional leaders understand that employers cannot afford to wait until next year for relief from the broad economic impacts of the coronavirus pandemic,” said Stephen E. Sandherr, the association’s chief executive officer. “We stand ready to work with Congress to make sure any new relief measures include new infrastructure investments, tax relief and liability reform so honest firms don’t fall victim to predatory lawyers seeking to profit from the coronavirus.”
