Skip to main content
Submitted by cdp-inc on September 4, 2020 - 2:54pm

According to data released today by the US Bureau of Labor Statistics, the national construction industry added 16,000 jobs on net in August.

Key Takeaways

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

Construction Employment Continues to Recover in August, Says ABC

WASHINGTONSept. 4—Construction industry employment expanded by 16,000 jobs on net in August, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. Over the last four months, the industry added 658,000 jobs, recovering approximately 61% of the jobs lost during March and April.

The construction unemployment rate, which reached 16.6% in April, stood at 7.6% in August, up 4 percentage points from the same time last year and down 1.3 percentage points from July. Unemployment across all industries declined substantially from 10.2% in July to 8.4% in August. This occurred despite an increase in the nation’s labor force participation rate, which rose from 61.4% in July to 61.7% last month.

“In July, the pace of job creation slowed compared to May and June, in part due to a slowing of economic reopening as COVID-19 became more pervasive in the South and more recently in the Midwest,” said ABC Chief Economist Anirban Basu. “Accordingly, there were projections that the August jobs report could massively disappoint.”

“But rather, today’s report indicates that America’s nascent economic recovery remains fully in place,” said Basu. “The big news was that the nation’s rate of unemployment declined to 8.4%, even as more people reentered the job market, which was due in part to a cessation of a sizable federal supplement to state unemployment insurance benefits.

“Despite the ongoing economic momentum, nonresidential contractors should brace for a challenging year,” said Basu. “While the overall economy and the construction industry added jobs in August, nonresidential employment shrank due to tighter financing conditions, diminished cashflow among property owners, lingering uncertainty, elevated commercial vacancy and project postponements and cancellations. There is also the possibility of another downturn beginning late this year or in early 2021 as temperatures cool and viral spread accelerates. Of course, it is conceivable that outcomes will prove far more benign than expected if a vaccine becomes widely available and the federal government passes a meaningful infrastructure package.”


Press Release from Associated General Contractors of America (AGC)

Construction Sector Adds 16,000 Workers In August But Nonresidential Jobs Shrink; Association Survey Finds Contractor Pessimism Is Increasing

Postponed and Canceled Projects Proliferate, Yet Majority of Firms Report Difficulty Filling Hourly Craft Positions; Officials Urge Immediate Federal Action to Fund Infrastructure and Enact Liability Reforms

Construction employment increased by 16,000 jobs in August, but the gains were concentrated in housing, while the infrastructure and nonresidential building construction sector lost 11,000 jobs, according to an analysis by the Associated General Contractors of America of government data released today. The new jobs data comes as association officials reported that a survey of more than 2000 contractors it released this week found growing pessimism about a return to normal levels of construction business amid a proliferation of project cancellations.

“Construction is becoming a tale of two sectors, as homebuilding and limited nonresidential niches thrive but most other private, as well as public, construction shrinks,” said Ken Simonson, the association’s chief economist. “These employment numbers are in line with our survey, which found a plurality of construction firms expect it will take more than six months before their volume of business matches year-ago levels.”

The AGC of America-Autodesk Workforce Survey, released on September 2, found that 38 percent of respondents expect it will take more than six months for their firm’s volume of business to return to normal, relative to a year earlier. In a survey the association conducted in mid-June, only 30 percent of firms said they expected a return to normal volume would require more than six months.

A likely reason for the more pessimistic outlook is the rapid increase in postponed or canceled projects, the economist said. He noted that the latest survey found 60 percent of firms report a scheduled project has been postponed or canceled, nearly double the 32 percent reporting cancellations in the June survey.

The employment pickup in August was limited to homebuilding, home improvement and a portion of nonresidential construction, Simonson noted. There was a rise of 27,700 jobs in residential construction employment, comprising residential building (3,200) and residential specialty trade contractors (24,500). There was a net decrease of 11,000 jobs in nonresidential construction employment, covering nonresidential building (10,200), specialty trades (-15,700) and heavy and civil engineering construction (-5,500).

The industry’s unemployment rate in August was 7.6 percent, with 762,000 former construction workers idled. These figures were more than double the August 2019 figures of 3.6 percent and 361,000 workers, respectively.

Association officials said that the commercial construction sector was likely to continue losing jobs without additional federal coronavirus relief measures. They urged Congress and the administration to pass a one-year extension to the current highway and transit law so state officials can properly plan for the next construction season. They also called for additional infrastructure funding, liability protections for contractors who are taking appropriate steps to protect workers from the coronavirus and other pro-growth measures.

“It is clear that the commercial construction industry will not begin to recover unless Washington can enact responsible new recovery measures,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress and the administration should take the opportunity to create needed new middle-class jobs, rebuild infrastructure and restore the economy.”