According to data released today by the US Bureau of Labor Statistics:
- The construction industry added 25,000 jobs on net in July. Year-over-year, industry employment has risen by 239,000 jobs, or an increase of 3%.
- Nonresidential construction employment increased by16,200 positions on net, with growth in all 3 subcategories.
- "Despite indications that the broader economy is slowing, the construction industry continued to add jobs at a rapid pace in June. Contractors added another 27,000 jobs for the month, with hiring concentrated in the nonresidential segment. Nonresidential construction employment has expanded 3.8% over the past year, a rate of growth over twice as fast as that of the broader economy."
Press Release from Associated Builders and Contractors, Inc (ABC)
ABC: Nonresidential Construction Employment Increases in July, But Recession Looms
WASHINGTON, Aug. 2—The construction industry added 25,000 jobs on net 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 239,000 jobs, an increase of 3.0%.
Nonresidential construction employment increased by 16,200 positions on net, with growth in all three subcategories. Nonresidential specialty trade contractors added the most jobs, increasing by 11,300 positions. Heavy and civil engineering and nonresidential building added 2,900 and 2,000 jobs, respectively.
The construction unemployment rate rose to 3.9% in July. Unemployment across all industries rose from 4.1% in June to 4.3% last month.
“It appears that America is headed into recession,” said ABC Chief Economist Anirban Basu. “While it is true that many economists have been suggesting this for more than two years, the recent slowing in economic activity feels different. Unemployment is climbing rapidly. Consumer spending growth has become more sluggish. U.S. equity markets are generating large losses, an indication that America is caught in a growth scare and that there is a growing consensus that the Federal Reserve has waited too long to begin reducing interest rates.
“Given that macroeconomic backdrop, it may seem peculiar that the U.S. construction industry managed to add 25,000 jobs in July,” said Basu. “How can one suggest that the U.S. economy is heading into recession when contractors are still eagerly hiring workers? In this regard, history is instructive. Nonresidential construction industry performance has tended to lag the performance of the overall economy by 12 to 18 months. According to ABC’s Construction Confidence Index, contractors collectively remain upbeat regarding their prospects for the next six months. But if the economy continues to weaken, and it appears poised to do precisely that, contractor confidence will begin to ebb. Indeed, the June construction spending data released on Aug. 1 indicate that many construction segments are already in slowdown mode.
“An exception to this is construction related to manufacturing,” said Basu. “The fastest segment of growth in construction spending has been in building construction, which encompasses massive investments in chip-making facilities and other industrial projects. Much of that is fueled in part by federal subsidies. But many construction segments do not benefit from federal subsidies, and those are the sectors that stand to experience the most erosion in performance as the economy softens and elevated borrowing costs linger.”
Press Release from Associated General Contractors of America (AGC)
Average Construction Pay Hits $35.77 an Hour as Firms Work to Hire Enough People to Keep Pace with Demand, Construction Officials Urge Public Officials to Boost Support for Workforce Education
The construction sector added 25,000 jobs in July as wage gains continued to outpace increases in the broader economy, according to an analysis of new government data the Associated General Contractors of America released today. Association officials said the biggest challenge for the industry remains finding enough workers to keep pace with demand and urged public officials to boost support for construction education and training programs.
“The construction industry has maintained a steady pace of employment gains even as job growth has cooled in other sectors,” said Ken Simonson, the association’s chief economist. “Both residential and nonresidential construction firms are adding workers, and the industry’s ‘wage premium’ is growing relative to other sectors.”
Construction employment in July totaled 8,260,000, seasonally adjusted, an increase of 25,000 from June. The sector has added 239,000 jobs or 3.0 percent during the past 12 months, nearly double the 1.6 percent increase for total nonfarm employment.
All types of construction firms added employees in July. Nonresidential construction firms added 16,200 employees, including 2,000 at building firms, 11,300 at specialty trade contractors, and 2,900 at heavy and civil engineering construction firms. Employment at residential firms rose by 9,100, including 1,700 at builders and 7,400 at specialty trade contractors.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 4.4 percent over the year to $35.77 per hour. In contrast, overall private sector pay for production workers rose 3.8 percent, to $30.14. That difference in hourly pay constituted a wage “premium” of nearly 19 percent compared to the overall private sector.
The unemployment rate among jobseekers with construction experience was 3.9 percent in July, unchanged from a year earlier. Simonson remarked that this is another indication of steady demand for construction.
Association officials noted that the federal government spends four times more each year on four-year degree programs than it does on training and education programs for fields like construction. They urged public officials at all levels of government to boost funding for program that expose workers to career opportunities in fields like construction. They also called on Congress and the Biden administration to allow more people to lawfully enter the country to work in construction to provide short-term relief for workforce shortages.
“Considering that construction careers pay well and are in demand, it makes sense for public officials to do more to expose people to the profession,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Construction firms can’t build if they don’t have enough people to do the work.”
