Nonresidential Construction Employment Roughly Flat in July

According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 4,000 net new jobs in July.

Key Takeaways

  • The construction industry added 4,000 net new jobs in July and, on a year-over-year basis, has expanded by 202,000 jobs, an increase of 2.8%.
  • The construction unemployment rate stood at 3.8% in July, up 0.4% from the same time last year. Unemployment across all industries stood at 3.7% in July, unchanged from the previous month.
  • Nonresidential construction employment lost 2,800 jobs on net in July but has still expanded by 122,300 jobs over the past 12 months. The bulk of the job loss came from the heavy and civil engineering segment, which lost 4,300 jobs on a monthly basis in July.
  • “Despite these recent signs of a slowdown or pause in construction hiring, contractors still say it is very difficult to find qualified workers, and the latest government data on construction job openings showed they set yet another record high in May.”


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

Nonresidential Construction Employment Roughly Flat in July, Says ABC

WASHINGTON, Aug. 2—The construction industry added 4,000 net new jobs in July, 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 202,000 net jobs, an increase of 2.8%.

Nonresidential construction employment lost 2,800 jobs on net in July but has still expanded by 122,300 jobs over the past 12 months. The bulk of the job loss came from the heavy and civil engineering segment, which lost 4,300 jobs on a monthly basis in July. Nonresidential specialty trade contractors added 1,400 net new jobs, while nonresidential building employment remained virtually unchanged.

The construction unemployment rate stood at 3.8% in July, up 0.4 percentage points from the same time last year. Unemployment across all industries stood at 3.7% in July, unchanged from the previous month.

"It is often said that employment is a lagging indicator," said ABC Chief Economist Anirban Basu. "What that means is that the economy can continue to add jobs at a brisk pace even after it has begun to slow. Many economists will make the claim that today's employment numbers reflect the economy’s past strength and are not indicative of its current condition. Perhaps, but that doesn't change the fact that America added 164,000 jobs in July nor that more households have bolstered their spending power as a consequence. Labor force participation ticked higher, another positive sign.

“Those economists who focus on construction were especially attuned to today's employment release,” said Basu. “Construction spending data have been weak, with both public and private nonresidential construction spending dipping during the most recent month for which data are available. Indeed, overall nonresidential construction employment declined last month, but only because of a decline in the heavy and civil engineering segment, which could prove temporary. Nonresidential specialty trade contractors and nonresidential builders both added jobs last month, albeit at a modest rate, consistent with elevated backlog reported to ABC via its monthly survey.

“While today's data were broadly upbeat, risks abound,” said Basu. “It's difficult to establish which risk is the most serious, but the list is long: trade disputes, Iran, corporate debt, household debt, federal debt, elevated and vulnerable asset prices, and the specter of next year's elections, which may induce many economic actors, including real estate developers, to embrace a wait-and-see posture. The election's growing imminence may itself be enough to further slow U.S. economic growth.”


Press Release from Associated General Contractors of America (AGC)


Construction Employment Rises by 4,000 in July and 202,000 Over the Past Year as the Sector's Unemployment Rate Increases from 3.4 to 3.8 Percent

Average Hourly Earnings in Construction Top Private Sector Average by 9.9 Percent as Construction Firms Continue to Boost Pay to Attract Limited Pool of Available, Qualified Workers

Construction employment increased by 4,000 jobs in July and by 202,000, or 2.8 percent, over the past 12 months, while the number of unemployed jobseekers with construction experience rose, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that many firms likely would have added more employees last month if more were available.

“Job gains in construction have slowed markedly in recent months but the industry is still increasing employment nearly twice as much as other employers,” said Ken Simonson, the association’s chief economist. “The recent slowdown in hiring and construction spending may reflect contractors’ difficulty in finding enough qualified workers, rather than a downturn in demand for projects.”

Simonson noted that the 2.8 percent growth in construction employment between July 2018 and July 2019 was the slowest in more than six years but that the rate remained close to double the 1.5 percent increase in total nonfarm payroll employment. The unemployment rate for jobseekers who last worked in construction increased from 3.4 percent in July 2018 to 3.8 percent, but Simonson said that was nevertheless the second-lowest July rate since the series began in 2000.

“Despite these recent signs of a slowdown or pause in construction hiring, contractors still say it is very difficult to find qualified workers, and the latest government data on construction job openings showed they set yet another record high in May,” Simonson commented. “Contractors in all parts of the nation remain busy and are not reporting that owners are canceling or delaying project starts, which would be a more convincing sign of a downturn.”

Average hourly earnings in construction—a measure of all wages and salaries—increased 2.8 percent over the year to $30.75. That figure was 9.9 percent higher than the private-sector average of $27.98, the association official noted.

Association officials noted that construction firms continue to boost pay and other benefits as they work to recruit more people into the industry. They added that most firms report having a hard time finding qualified workers to hire, which is likely holding back broader employment gains in the sector. They urged Congress to pass measures to boost career and technical education and make students studying construction in community and technical colleges eligible for federal Pell Grants.

“Other than construction careers, few other jobs in today’s economy pay as well without requiring workers to pay for a costly college education,” said Stephen E. Sandherr, the association’s chief executive officer. “Washington can help put more young adults into high-paying construction careers by boosting funding for career and technical education and treating collegiate construction programs the same as other fields of study.”

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