According to data released last week by the US Bureau of Labor Statistics, the national construction industry gained 110,000 jobs on net in March.
Press Release from Associated Builders and Contractors, Inc (ABC)
WASHINGTON, April 2—The construction industry added 110,000 jobs in March, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. The industry has added 931,000 jobs since April 2020, recovering 83.6% of the jobs lost during earlier stages of the COVID-19 pandemic.
The construction unemployment rate fell to 8.6% in March from 9.6% in February, but it is still 1.7 percentage points higher than in March 2020. Unemployment across all industries declined from 6.2% in February to 6.0% in March.
A significant percentage of the job growth was registered in nonresidential construction, which added 73,100 jobs in March. The number of nonresidential specialty trade contractor positions expanded by 38,200, while the nonresidential building segment added 7,600 positions.
“Here comes the tsunami of economic and employment growth across America,” said ABC Chief Economist Anirban Basu. “With more stimulus on the way, the United States may end up growing faster than China this year, which would be the first time that occurred in decades.
“Much of the stimulus to come will directly affect construction, particularly the heavy and civil engineering segment,” said Basu. “While any infrastructure stimulus should be geared toward projects generating the highest rates of return and open to bids by all competent contractors, the sheer volume of money flowing into the economy is set to create massive forward momentum for the balance of 2021 and likely through 2022. Contractor optimism seems to reflect this building momentum, according to the latest ABC Construction Confidence Index.
“As always, there are risks,” said Basu. “The federal government is borrowing heavily to stimulate the economy. Inflationary pressures are likely to become more apparent during the months ahead, translating into rising interest rates. Already, key construction inputs such as softwood lumber and diesel fuel have experienced sharp price increases over the course of the pandemic. At some point in the future, the U.S. economy could see not only faltering stimulus, a massive national debt and higher costs of capital, but also higher taxes. That does not represent a promising recipe for contractor health. For now, however, it is all systems go.”
Press Release from Associated General Contractors of America (AGC)
Association Officials Note that Continued Construction Job Gains Could be Impacted by New Infrastructure Funding Proposals, Rising Materials Prices, Erratic Delivery Schedules and Broader Market Uncertainty
Construction employment climbed by 110,000 in March as the industry recovered from severe winter weather that pushed employment down by 56,000 in February, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said they were encouraged by the recent job gains and the potential for new infrastructure investments. But they cautioned that rising prices and erratic delivery schedules for key construction materials—as documented in their recent Construction Inflation Alert–and continued project cancellations could undermine the sector’s recovery.
“The rebound in March is certainly good news, but contractors face growing challenges that imperil further growth in nonresidential employment,” said Ken Simonson, the association’s chief economist. “In fact, industry job gains in the first quarter of 2021 as a whole have slowed sharply from the second half of 2020.”
Construction employment in March totaled 7,466,000, which was 182,000 employees or 2.4 percent below the most recent peak in February 2020. Over the past three months, the industry added 66,000 jobs, an average of 22,000 per month. In contrast, construction employment increased more than three times as fast from June to December last year, with an average gain of 76,000 jobs per month, the economist noted.
Nonresidential construction is experiencing headwinds from postponed and canceled projects, steep increases in materials costs, and lengthening delivery times. Simonson pointed out that the nonresidential sector—comprising nonresidential building, specialty trades, and heavy and civil engineering contractors—remains 231,000 jobs or 4.9 percent shy of the pre-pandemic peak set in February 2020, whereas employment among residential building and specialty trade contractors is 49,000 or 1.6 percent above the February level.
Unemployment in construction remains elevated. A total of 835,000 former construction workers were unemployed in March, up from 658,000 a year earlier and the highest for March since 2014. The industry’s unemployment rate in March was 8.6 percent, compared to 6.9 percent in March 2020.
Association officials said the best way to ensure continued construction job gains was for Congress to act on the President’s infrastructure funding recommendations without the tax and regulatory additions that would imperil broader economic growth. They also continued to call for the removal of tariffs on key construction materials and federal measures to address port and shipping backups.
“It will take more than nice weather for the construction industry to keep adding jobs this year,” said Stephen E. Sandherr, the association’s chief executive officer. “Investing in infrastructure, avoiding needless new regulations and counterproductive tax hikes, and fixing the supply chain will help the industry create many more high-paying construction career opportunities over the coming months.”