Nonresidential Construction Employment Rises in September

According to data released today by the US Bureau of Labor Statistics, the national construction industry added 7,000 net new jobs in September.

Key Takeaways

  • The construction industry added 7,000 net new jobs in September and, on a year-over-year basis, has expanded by 156,000 jobs, an increase of 2.1%.
  • The construction unemployment rate stood at 3.2% in September, down 0.9 percentage points from the same time last year. Unemployment across all industries was 3.5% in September, 0.2 percentage points lower than the previous month. This was the lowest recorded rate since December 1969.
  • Nonresidential construction employment increased by 3,800 jobs on net in September and is up by 96,300 net jobs during the last 12 months.
  • "The ongoing declines in various measures of unemployment are consistent with the notion that the average contractor, including subcontractors, will continue to face enormous difficulty recruiting new employees. Many contractors continue to pay for substantial overtime, translating into flat profit margins or worse in the context of still plentiful bidding opportunities."


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

Nonresidential Construction Employment Rises in September, Says ABC

WASHINGTON, Oct. 4 – The construction industry added 7,000 net new jobs in September, 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 156,000 jobs, an increase of 2.1%.

Nonresidential construction employment increased by 3,800 jobs on net in September and is up by 96,300 net jobs during the last 12 months. Job gains were split between nonresidential specialty trade and heavy and civil engineering, which added 3,000 and 2,400 net new positions, respectively. Nonresidential building lost 1,600 jobs last month and is down 8,400 jobs for the year.

The construction unemployment rate stood at 3.2% in September, down 0.9 percentage points from the same time last year. Unemployment across all industries was 3.5% in September, 0.2 percentage points lower than the previous month. This was the lowest recorded rate since December 1969.

“In many ways, this is another perfect employment data release,” said ABC Chief Economist Anirban Basu. “While some economists will point out that the 136,000 net new jobs fell short of expectations, data characterizing labor market performance were revised upward for a net gain of 45,000 jobs in July and August. In addition, September’s 3.5% unemployment rate is a 50-year low. A bit less attention will be paid to the fact that year-over-year wage growth came in at 2.9%, the lowest increase since July 2018. In total, today’s data release suggests that the current U.S. economic expansion will persist for the foreseeable future, as ongoing job growth propels consumer spending and as surprisingly modest inflationary pressures keep interest rate increases at bay.

“Nonresidential construction employment continued to expand in September, a reflection of a segment that remains flush with work,” said Basu. “The ongoing declines in various measures of unemployment are consistent with the notion that the average contractor, including subcontractors, will continue to face enormous difficulty recruiting new employees. Many contractors continue to pay for substantial overtime, translating into flat profit margins or worse in the context of still plentiful bidding opportunities.

“There is, however, some cause for concern,” said Basu. “Momentum in commercial construction appears to be fading, perhaps due to a sense that certain market segments have become overbuilt and/or because the cost of construction services has risen sufficiently to render certain projects uneconomical. Recent readings of leading indicators such as the Architecture Billings Index suggest that the pace of design work has begun to soften in recent months. This is consistent with today’s data release, which indicated that the nonresidential building segment lost 1,600 jobs in September and 8,400 over the past year.”


Press Release from Associated General Contractors of America(AGC)

Construction Employment Rises By 7,000 In September and 156,000 In 12 Months; Hiring Slowdown Likely Reflects Tight Labor Market, Not Slump In Demand

Industry’s Job Gains and Average Hourly Earnings Outpace Broader Economy as Association Survey Finds Contractors Expect to Keep Hiring; Officials Urge Boost to Career and Technical Education, Immigration

Construction employment increased by 7,000 jobs in September and by 156,000, or 2.1 percent, over the past 12 months, while the number of unemployed jobseekers with construction experience reached a record low for September, according to an analysis of new government data by the Associated General Contractors of America. Association officials said the modest increase in employment likely reflects tight labor conditions and urged federal officials to increase funding for career and technical education and pass immigration reform.

“Contractors foresee plenty of projects to bid on, and nearly three-fourths of firms expect to add workers during the next twelve months, but most are finding it hard to find qualified workers to hire,” said Ken Simonson, the association’s chief economist, referring to the results of a survey the association released in late August. “That’s not surprising, given that the total unemployment rate hit a 50-year low in September—a sign that workers are hard to come by throughout the economy.”

Simonson observed that the 2.1 percent growth in construction employment between September 2018 and September 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 319,000 unemployed jobseekers who last worked in construction—an unemployment rate of 3.2 percent for such workers. Simonson noted those were the lowest September levels since the series began in 2000.

Average hourly earnings in construction—a measure of all wages and salaries—increased 2.2 percent over the year to $30.81. That figure was 9.7 percent higher than the private-sector average of $28.09, 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.

“Contractors are going to great lengths to recruit, prepare and hire new workers, but too few young adults know about the rewarding opportunities available to them in construction,” said Stephen E. Sandherr, the association’s chief executive officer. “Getting federal and state officials to boost funding for career and technical education will create significantly more programs that allow a greater number of students to consider careers in the construction industry.”

shadow