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Submitted by cdp-inc on September 7, 2021 - 12:30pm

According to data released last week by the US Bureau of Labor Statistics, the national construction industry lost 3,000 jobs on net in August.

Key Takeaways

 

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

Nonresidential Construction Loses 20,300 Jobs in August, Says ABC

WASHINGTON, Sept. 3—The construction industry lost 3,000 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. Despite the monthly setback, the industry has recovered 881,000 (79.2%) of the jobs lost during earlier stages of the pandemic.

Nonresidential construction employment declined by 20,300 positions on net, with all three subcategories registering losses for the month. Nonresidential specialty trade contractors lost 9,200 jobs and heavy and civil engineering lost 8,300. Nonresidential building employment dipped by 2,800 positions.

The construction unemployment rate fell sharply to 4.6% in August. Unemployment across all industries declined from 5.4% in July to 5.2% last month.

“Many observers will simply attribute today’s extraordinarily disappointing employment report to the malicious impacts of the delta variant,” said ABC Chief Economist Anirban Basu. “While the ongoing pandemic clearly had an impact on employment in segments such as retail, lodging and restaurants in August by suppressing demand for additional workers, construction employment dynamics were more affected by ongoing supply-side bottlenecks.

“Collectively, nonresidential contractors exhibited significant confidence in the past few months,” said Basu. “In general, positive expectations have gone unmet, at least thus far. Industry participants had anticipated rising employment during the back half of 2021, according to ABC’s Construction Confidence Index, but nonresidential employment declined by more than 20,000 positions in August. Anecdotal evidence suggests that many projects have been put on hold. This is due to lofty construction costs, which is the result of global supply chains in disarray and growing difficulty hiring skilled construction workers.

“What is truly unnerving is that despite the loss of industry jobs in August, the construction unemployment rate actually declined from 6.1% in July to 4.6% last month,” said Basu. “The implication is that the construction workforce is not expanding. This opens up the possibility that labor costs could continue to rise rapidly even if industry momentum softens further. Furthermore, with the delta variant causing additional supply chain disruptions in Asia and elsewhere, materials prices may not decline as rapidly as had been hoped. This potentially sets the stage for waning industry momentum as 2022 approaches. The good news is that today’s weak employment numbers will likely help keep interest rates lower for a lengthier period.”


Press Release from Associated General Contractors of America (AGC)

Construction Sheds 3,000 Jobs In August; Gains Are Limited To Homebuilding As Other Contractors Struggle To Fill Both Craft And Salaried Positions

Association Officials Urge Congress to Finish Work on Bipartisan Infrastructure Bill to Boost Demand for Nonresidential Construction and Fund Career and Technical Education Programs to Add to Worker Supply

The construction industry lost 3,000 jobs between July and August as ongoing declines in nonresidential segments offset a pickup among residential building and remodeling firms, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said their newly released survey shows many contractors are eager to hire but are encountering a lack of qualified applicants and supply-chain delays that are holding back nonresidential employment gains.

“Today’s figures show that nonresidential building and infrastructure contractors are having a hard time recovering from the impact of the pandemic on demand for structures,” said Ken Simonson, the association’s chief economist. “At the same time, our survey finds many contractors have job openings but are experiencing a lack of qualified applicants, shortages of materials and long delivery delays.”

Construction employment in August totaled 7,416,000, a drop of 3,000 from July. Employment among nonresidential firms—comprising heavy and civil engineering construction firms, along with nonresidential building and specialty trade contractors—shrank for the fifth month in a row, by 20,300. In contrast, homebuilders and residential specialty trade contractors added 17,400 workers, the fourth-straight gain.

Despite the job losses for nonresidential construction firms, the association’s annual workforce survey, conducted with Autodesk, found many of its members—nonresidential and multifamily contractors—have unfilled job openings. Ninety percent of the more than 2,100 firms that responded had openings for hourly craft workers, while 62 percent had openings for salaried employees. Overwhelming percentages of firms with openings reported having a hard time filling positions, including 89 percent of the companies seeking craft workers and 86 percent of those looking for salaried employees.

Contractors are facing multiple challenges. Seventy-two percent of survey respondents reported that available job candidates were not qualified. Three-quarters of the firms reported projects were delayed due to longer lead times or shortages of materials, while 57 percent reported delivery delays.

Association officials called on officials in Washington to address both immediate and long-term needs for the construction industry. They urged lawmakers to finish work on the Senate-passed infrastructure bill and provide more funding for career and technical education programs that will attract and prepare more people for high-paying careers in construction.

“Contractors are eager to hire more workers but they need Washington officials to make sure there is enough funding for vitally needed infrastructure to justify hiring,” said Stephen E. Sandherr, the association’s chief executive officer. “In addition, more federal money should be going into preparing workers to execute these projects.”